Britain's top share index advanced on Friday as commodity-related stocks rebounded, with precious metals miners in demand after a disappointing US jobs report. US jobs data showed that the US economy created the fewest number of jobs in more than five years in May, with non-farm payrolls rising by only 38,000 jobs last month. Economists polled by Reuters had forecast a rise of 164,000. Such weakness in the US labour market could make it more difficult for the US Federal Reserve to hike interest rates.
"This is a really bad figure and there will be consequences," Ken Odeluga, market analyst at City Index, said, adding that he expected the Federal Reserve to soften its hawkish tone. Britain's FTSE 100 was up 24.02 points, or 0.4 percent, at 6,209.63 points at its close, having reduced gains made earlier in the session. Precious metals miners were in demand as investors sought safe-haven assets with Fresnillo and Randgold Resources rallying 7.6 percent and 6.8 percent respectively.
Mining shares gained 3.8 percent, the sector's biggest daily gain in a month and half, and energy shares were also up 1.2 percent as oil and copper prices rose. Brent crude climbed above $50 a barrel to near seven-month highs, despite an Opec meeting that yielded no deal on a supply ceiling. Investors took heart from Saudi Arabia's pledge not to flood the market and from a decline in US crude supply. Oil majors BP and Shell were up 1.5 percent and 0.9 percent respectively.
"The perkiness of its commodity sector (is) the main driver of growth this Friday despite another display of Opec's ineffectiveness on Thursday," Connor Campbell, financial analyst at Spreadex, said in a note. UK mid-cap Indivior surged over 36 percent after the pharmaceuticals company won a ruling to keep generic versions of Suboxane off the US market until 2024, according to a media report.
British supermarket stocks were the biggest fallers on the bluechip index, however, with Tesco, Sainsbury and Morrison all down between 3.8 percent and 4.4 percent respectively. One trader cited a Bloomberg share report indicating Wal-Mart's Asda plans to lower prices.
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