3rd May 2013
The FTSE 100 index of the UK’s biggest firms enjoyed a five-year high on Friday as better-than-expected US employment data bolstered markets.
The top flight index leapt to 6,534.6 points, its best intraday peak for more than five years after news emerged from the US that job numbers had risen by some 165,000 last month and data for both February and January had been revised upwards.
Schroders chief economist Keith Wade commenting on the figures says he feels they highlight the underlying strength of the economy and may help quell fears about the US economy entering a soft patch and repeating the pattern seen in the past three years. Yet he cautioned: “However we still believe growth will cool from the pace of the first quarter as the inventory cycle turns, consumers react to higher taxes and the full effects of the sequester come through.”
The Footsie also enjoyed a day in the sun on Thursday, rising by 9.4 points to 6,460.7 after the widely expected interest rate cut by the European Central Bank came through. The central bank lowered its main refinancing rate by 0.25% to 0.5% in a bid to boost the struggling eurozone’s economy. The Footsie closed 1% up over the week at 6,521.46.
Imperial Tobacco’s shares crept up by nearly 4% to 2,358p after it emerged that the Government had jettisoned plans to have all cigarette brands sold in plain packaging, a policy which has already been adopted in Australia. The biggest mover on the index, driven by a strong market update was Aberdeen Asset Management. The fund management group announced that its pre-tax profits over six months had risen by 37% to £223m. Its shares firmed by 10% during the week to close at 459.6p.
Elsewhere the taxpayer owned Royal Bank of Scotland posted first quarter profit before tax of £826m. The market was unconvinced by the improving results and its shares slid by 2% to 289.8p over the week. For its part the 39% state-owned Lloyds Banking Group announced pre-tax profits of £2.04bn for the first three months of the year, a steep rise from the £280m for the same period last year. Over the week its shares rose 2% to 54.05p. As for other UK listed banks, HSBC’s share price enjoyed a 2% increase to 713.9p while Standard Chartered also saw its shares climb 2% to 1657p.
The newly formed Glencore Xstrata enjoyed its first day of trading on Friday. The newly formed resources giant, created as a result of the largest mining deal in history saw its shares over the week jump by 8% to 343.95p while Eurasian Natural Resources, managed a 9% rise to 292.7p. Fellow mining groups, Rio Tinto and BHP Billiton jumped 2% apiece to respective share prices of 3022.5p and 1847.5p.
Broadcasting giant BSkyB said its operating profits rose by 9% to £994million in the nine months to March 31 and subscriber for the first time had surpassed 30million. Its shares were 1% better over the week, closing at 860p.