A
disappointing US jobs report and comments from
Vladimir Putin
sparked a choppy end to trade on Friday, resulting in meagre gains on
the FTSE 100 as risk appetite was scaled back before the weekend.
The FTSE 100 ended the day up just 14.89 points at 6,547.33, a rise of 0.23%. Still, this was the highest close for London’s
benchmark index since August 14th.
After a subdued start, markets rallied strongly after a worse-than-expected gain in
American jobs, given increased hopes that the
Federal Reserve
will delay a potential tapering of monetary stimulus until later this
year. Just 169,000 non-farm payrolls were added in August, less than
estimates, while figures for July were revised lower. Yet the
unemployment rate unexpectedly fell from 7.4% to 7.3% in August, the
lowest since December 2008.
“Our best guess is that the
cumulative evidence of improvement over the past year will convince a
majority of officials that the tapering should begin at the next FOMC
meeting in another couple of weeks' time, but we're not going to pretend
this is a certainty,” said Chief US Economist Paul Ashworth from
Capital Economics.
Following a brief stint in positive territory, stocks sank sharply into the red after Putin said
Russia would “assist” Syria if the US attacked, escalating tensions between President
Barack Obama and his Russian counterpart as they meet along with other world leaders at the G20 Summit in St Petersburg.
Obama is currently trying to rally for support for the military
intervention in Syria following the alleged use of chemical weapons by
Bashar Al-Assad’s regime. US Congress is reportedly due to vote on whether or not to attack next week.
“Before the G20 summit, President Obama had just the one country to
deal with, but Vladimir Putin has now snookered him by giving his
support for the Assad government should a military invasion occur,” said
Market Analyst David Madden from IG.
“The US is keen to bring
stability to the region, but now Washington will have to smooth things
over with Moscow before stepping foot on Syrian soil, and this adds
even more uncertainty to the situation,” he said.
FTSE 100: Tullow jumps after Norway discovery
Tullow Oil
rose strongly after revealing that the Wisting Central exploration well
has made the first-ever oil discovery in the 20%-owned Hoop-Maud Basin
in the Barents Sea offshore Norway. The oil and gas explorer said the
well, which was drilled to a total depth of 905m and a water depth of
373m, had discovered 50m to 60m of net light oil pay in good quality
relatively shallow middle to lower Jurassic reservoir rocks.
Shares in Chile-based copper miner
Antofagasta
were making gains after analysts at Canaccord Genuity raised their
outlook for free cash flow and highlighted the prospect of a special
dividend
in the new few years.
Airline group
easyJet was continuing to recover after heavy falls on Wednesday following a profit warning from sector peer
Ryanair. Improved traffic statistics for FTSE 100-listed easyJet yesterday helped the share price to rebound.
Accountancy software group
Sage was a heavy faller today after Morgan Stanley downgraded its rating on the stock to 'underweight'.
Engineering and project management company
AMEC declined despite scoring a contract with TAQA for work on the Tern oil production platform in the North Sea.
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