Britain's FTSE 100 rose 2.17 percent on Friday, weathering worse-than-expected US jobs data as oil shares strode higher and British Airways leapt after holding its profit forecast. The FTSE 100 closed up 92.55 points at 4,364.96. The index bounced from a 5.7 percent slump on Thursday, when the Bank of England's surprisingly large 150 basis point rate cut failed to quell investors' jitters.
British Airways climbed 11.9 percent after the airline stuck to its forecast for a small operating profit this year and lifted its revenue target. US and European markets bounced from their previous session's hefty losses, with bargain-hunting helping to eclipse the grim US data. "The market was braced for a bad figure and is clearly expecting a rate cut," Jeremy Batstone-Carr, head of private client research at Charles Stanley, said of the jobs data.
Job losses in October were worse than feared, with employers cutting payrolls by 240,000, according to the Labour Department. The unemployment rate shot up to 6.5 percent from 6.1 percent in September, its highest since 1994. The FTSE 100 has fallen 32 percent so far this in a global equities sell-off as investors have feared the world economy may be heading into a deep and prolonged recession.
"You get spikes in bear markets, but while the trend in economic activity is down and the trend in corporate earnings is down, it's going to be hard for equities to make progress," Batstone-Carr said. Energy stocks were the top-weighted gainers on firmer crude prices. Among individual stocks, BP advanced 4.5 percent and Royal Dutch Shell gained 2.3 percent.
Miners tracked stronger metal prices. BHP Billiton, Kazakhmys and Vedanta Resources all rose between 4.8 and 6 percent. Credit ratings agency Moody's said Rio Tinto would lose income in 2009 as prices for key products such as copper, aluminium and iron ore decline, and as the value of assets it plans to sell slips. Rio rose 4.5 percent.
Banks were also higher on Friday, with the FTSE 350 banks index rising 1 percent. Lloyds TSB added 6.9 percent, Barclays was up 2.5 percent and HBOS put on 0.8 percent. Traditionally defensive pharmaceutical and tobacco stocks also rose. Among drugmakers GlaxoSmithKline and AstraZeneca both put on 3.5 percent, while Shire added 5 percent.
Tobacco groups Imperial Tobacco and British American Tobacco added 3.3 and 2.2 percent respectively. Private equity firm 3i Group shed 6.8 percent, extending the previous session's near 13 percent fall after it said first-half revenues from company disposals were down 43 percent as the credit crunch had made it more difficult to sell companies in which it had invested.
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