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Stock markets hit hard by weak US jobs report
(UPDATE) Share prices, Brent crude oil and US dollar drop as jobs update adds to concerns about the economy. Gold price jumps.
(UPDATE) Stock markets fell sharply and the gold price jumped after a report on the US labour market was much worse than expected, adding to concerns about the state of the recovery in the world's largest economy.
Non-farm payrolls rose by just 88,000 in March, around half of the figure expected from economists. Private sector payrolls rose by only 95,000, far short of the 209,000 anticipated.
The employment rate – a yardstick being used by the US Federal Reserve to time the end of its ultra-loose policy – fell to 7.6%, its lowest since December 2008, while February’s payroll count was revised up from 236,000 to 268,000. But analysts judged the mixed numbers to be a big disappointment, adding to other weak economic data this week.
'Until the US economy can add jobs consistently, policymakers won't be able to relax. We're back on red alert,' said Marcus Bullus, trading director at MB Capital.
Wall Street was poised for a big fall, with Dow futures pointing to 150 point losses. The dollar dropped by 0.2% to 82.518 against a basket of major currencies.
The FTSE 100, already lower before the report, was down 1.7% to 6235. French and German benchmark indices were 2% lower.
The gold price rose by 1% to 1,567 per ounce. Oil however fell amid the growing economic concerns, with Brent crude futures trading down 0.8% at $105.52 per barrel.
(0936) Flu fears, jobs jitters weaken stock markets
Expectations of a weak report on the US labour market this afternoon prompted more risk aversion from investors, who sold down European shares and the euro.
With investors already fretting over global growth prospects after yesterday’s trio of central bank decisions, Britain’s FTSE 100 was heading for its third day of losses, down 0.5% at 6,314. The pan-European Eurofirst 300 fell 0.2%.
Japan’s aggressive monetary policy stimulus extension dominated markets yesterday, sparking a rally in Japanese shares – which continued today – and later on Wall Street. But European shares sold off, with inactivity from the European Central Bank and Bank of England doing nothing to improve the mood.
In Asia today, the Nikkei’s 1.6% gains weren’t replicated elsewhere amid growing concerns over the conflict between North and South Korea and as the number of deaths caused by a new strain of bird flu in China grew.
The growing bird flu death toll, and associated concerns over demand for flights, also hit European airlines, with British Airways owner AIG (ICAG.L) the biggest faller among London blue chips, down 4.4% to 240p. Easyjet (EZJ.L) fell 3.9% to 1,054p despite reporting well received financial results, announcing it had narrowed a first-half loss thanks to Easter bookings.
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