London close: FTSE finishes higher as traders weigh UK jobs data

The FTSE 100 finished higher on Wednesday after a recovery in oil prices and a mixed report on UK jobs.

Oil prices rallied even as Iran's OPEC envoy, Mehdi Asali, said it was unlikely the nation would join an agreement with other global producers to freeze oil output to address the supply glut.

Iranian oil minister Bijan Zanganeh met with his counterparts from Iraq, Qatar and Venezuela on Wednesday in Tehran.

"Asking Iran to freeze its oil production level is illogical ... when Iran was under sanctions, some countries raised their output and they caused the drop in oil prices." Iran's OPEC envoy, Mehdi Asali, was quoted as saying by the Shargh daily newspaper on Wednesday.

Brent crude rose 5.6% to $34.12 per barrel and West Texas Intermediate increased 4.7% to $30.50 per barrel at 1639 GMT.

Meanwhile, the Office for National Statistics revealed the UK unemployment rate remained unchanged at 5.1% in the three months to December, missing expectations of 5.0%.

UK employers added 205,000 jobs to the economy during the three-month period, below forecasts for 225,000 extra people in work. Average weekly earnings rose 1.9%, in line with estimates, marking a slowdown from the previous quarter’s 2% increase. Jobless claims in January fell 14,800, ahead of expectations for a 3,000 drop.

Capital Economics said the easing in wages adds to the Bank of England’s case to keep interest rates unchanged for the time being. The BoE noted in its Inflation Report earlier in February that wage growth had “eased significantly” more than anticipated.

“The soft UK pay growth shown in today’s labour market figures – which is still at odds with the tightening labour market – highlights why the MPC won’t be raising rates anytime soon,” said Ruth Miller, UK economist at Capital Economics.

Across the pond, US industrial and manufacturing output figures from the Federal Reserve surprised to the upside. Industrial production was up 0.9% in January compared to a month ago, beating analysts’ estimates for a 0.4% increase. Manufacturing output rose 0.5% month-on-month in January, ahead of forecasts for a 0.2% gain.

US housing starts figures were less impressive, falling 3.8% in January on the month, trailing estimates for a 2% rise, the Commerce Department revealed. Mortgage applications in the US increased 8.2% in the week to 12 February, according to the Mortgage Bankers Association.

The Federal Reserve releases the minutes of its 26-27 January policy meeting at 1900 GMT, providing more details on its decision to hold interest rates steady. The minutes may offer clues on the next policy change after it raised the benchmark interest rate in December for the first time in nearly a decade.

In company news, Glencore shares gained as it secured early refinancing of a $8.45bn loan facility.

Anglo American advanced as Deutsche Bank and Credit Suisse lifted their target prices on the stock following the company’s full year results.

Aerospace and defence group Rolls-Royce was on the front foot amid media reports it is considering a bid by activist shareholder ValueAct for a seat on the board.

Auto Trader was a high riser as the company said after a good third quarter it expected full year results would be marginally ahead of current market expectations.

Going the other way, utility stocks were among the biggest fallers, including National Grid, Centrica, Severn Trent and United Utilities Group.

Market Movers

FTSE 100 (UKX) 6,020.99 2.71%
FTSE 250 (MCX) 16,125.31 2.69%
techMARK (TASX) 3,095.65 2.75%

FTSE 100 - Risers

Anglo American (AAL) 460.75p 15.78%
Glencore (GLEN) 118.15p 14.76%
Antofagasta (ANTO) 478.40p 8.58%
Aberdeen Asset Management (ADN) 245.00p 8.17%
InterContinental Hotels Group (IHG) 2,470.00p 7.11%
Legal & General Group (LGEN) 226.70p 7.09%
Rolls-Royce Holdings (RR.) 675.50p 6.97%
BHP Billiton (BLT) 740.00p 6.78%
Sports Direct International (SPD) 419.60p 6.47%
Hargreaves Lansdown (HL.) 1,254.00p 6.09%

FTSE 100 - Fallers

Severn Trent (SVT) 2,107.00p -0.80%
United Utilities Group (UU.) 917.50p -0.05%
National Grid (NG.) 955.30p -0.02%
SABMiller (SAB) 4,175.00p 0.00%
GlaxoSmithKline (GSK) 1,424.00p 0.46%
Rexam (REX) 602.00p 0.75%
Unilever (ULVR) 3,041.00p 0.86%
Compass Group (CPG) 1,226.00p 0.91%
Diageo (DGE) 1,830.00p 1.02%
British American Tobacco (BATS) 3,883.50p 1.03%

FTSE 250 - Risers

Vedanta Resources (VED) 269.30p 11.70%
Fidessa Group (FDSA) 2,270.00p 10.68%
Tullow Oil (TLW) 190.70p 9.98%
Pendragon (PDG) 38.99p 9.83%
Electrocomponents (ECM) 227.50p 8.59%
Savills (SVS) 710.00p 8.40%
Poundland Group (PLND) 163.80p 8.33%
Virgin Money Holdings (UK) (VM.) 312.70p 8.20%
Amec Foster Wheeler (AMFW) 380.10p 8.01%
Sophos Group (SOPH) 206.00p 7.18%

FTSE 250 - Fallers

NMC Health (NMC) 795.00p -2.09%
Evraz (EVR) 68.55p -1.44%
NB Global Floating Rate Income Fund Ltd GBP (NBLS) 85.90p -0.46%
Ladbrokes (LAD) 120.60p -0.41%
John Laing Infrastructure Fund Ltd (JLIF) 117.70p -0.34%
BH Macro Ltd. GBP Shares (BHMG) 2,007.00p -0.30%
P2P Global Investments (P2P) 850.00p -0.12%
Jimmy Choo (CHOO) 119.40p -0.00%
Electra Private Equity (ELTA) 3,326.00p 0.00%
SVG Capital (SVI) 483.00p 0.04%