London close: Stocks end lower on disappointing non-farm payrolls

The FTSE 100 closed in the red on Friday as the US non-farm payrolls report came in worse than anticipated.

US employers added 151,000 jobs, compared with consensus expectations for a 190,000 gain and a downwardly-revised 262,000 the previous month, the Labor Department’s non-farm payrolls data showed.

The unemployment rate fell to 4.9% from 5% in December, nearing an eight-year low. Economists had expected the rate to remain unchanged at 5%. Average hourly earnings rose 2.5% year-on-year in January, beating forecasts for a 2.2% increase.

"However confident Janet Yellen and her Fed colleagues were when raising interest rates in December, the US data released in January must be giving them food for thought – and today’s poor non-farm payroll figures are no different," said Dennis de Jong, managing director at UFX.com.

"Adding less than 200,000 jobs for the first time since October, coupled with lower than expected GDP and productivity figures, has taken some of the shine off of the previously buoyant US economy."

Meanwhile, the US trade deficit expanded in December to a seasonally adjusted $43.36bn from the previous month’s $42.23bn as exports fell 0.3% and imports increased 0.3%. Analysts had expected a deficit of $43.20bn.

Elsewhere, German factory orders fell 0.7% in December compared to a month earlier, which was a steeper decline than the 0.5% expected by economists.

Adding to the negative sentiment, oil prices reversed gains with Brent falling 0.43% to $34.31 per barrel and West Texas Intermediate dropping 0.47% to $31.57 per barrel at 1640 GMT.

On the company front, Anglo American rallied for a second day after Blackrock increased its stake in the miner.

Retailing company Kingfisher and fashion label Burberry rose as news came that January sales lured bargain hunters back to the High Street in January, according to figures released by accountancy and business advisory firm BDO.

Shares in Royal Mail sank as the government set the wheels in motion to dispose of its final stake in the postal service.

Just Eat advanced as it ordered four online takeaway food businesses in Spain, Italy, Brazil and Mexico for a total of €125m (£94.7m).

Ocado was up after a relatively positive note from Exane BNP Paribas. The investment bank retained its rating at ‘neutral’ but cut its target price to 275p.

Market Movers

FTSE 100 (UKX) 5,848.69 -0.85%
FTSE 250 (MCX) 16,018.61 -0.42%
techMARK (TASX) 3,034.66 -0.64%

FTSE 100 - Risers

Anglo American (AAL) 363.35p 10.68%
Antofagasta (ANTO) 446.30p 3.72%
Standard Chartered (STAN) 453.05p 3.57%
Burberry Group (BRBY) 1,219.00p 2.87%
Tesco (TSCO) 174.60p 2.77%
Sainsbury (J) (SBRY) 251.20p 2.49%
Glencore (GLEN) 102.15p 2.48%
Smiths Group (SMIN) 937.50p 2.24%
GKN (GKN) 269.90p 1.81%
Babcock International Group (BAB) 902.50p 1.58%

FTSE 100 - Fallers

Berkeley Group Holdings (The) (BKG) 3,390.00p -4.99%
Inmarsat (ISAT) 1,022.00p -4.31%
Persimmon (PSN) 1,970.00p -3.38%
Sky (SKY) 1,030.00p -3.38%
Taylor Wimpey (TW.) 182.80p -3.33%
WPP (WPP) 1,419.00p -3.14%
Royal Mail (RMG) 435.30p -3.14%
ITV (ITV) 256.50p -3.02%
Carnival (CCL) 3,128.00p -3.01%
Aviva (AV.) 431.60p -2.79%

FTSE 250 - Risers

Countrywide (CWD) 382.20p 7.45%
Evraz (EVR) 66.00p 7.32%
Entertainment One Limited (ETO) 146.00p 5.95%
Ocado Group (OCDO) 258.90p 5.67%
Vedanta Resources (VED) 244.00p 5.67%
Rotork (ROR) 163.60p 5.55%
Just Eat (JE.) 379.40p 5.39%
Meggitt (MGGT) 367.70p 5.18%
Bodycote (BOY) 552.00p 4.64%
Millennium & Copthorne Hotels (MLC) 407.90p 4.59%

FTSE 250 - Fallers

Marshalls (MSLH) 275.00p -7.72%
Domino's Pizza Group (DOM) 893.00p -6.10%
St. Modwen Properties (SMP) 356.20p -5.27%
Thomas Cook Group (TCG) 99.65p -5.10%
Rightmove (RMV) 3,666.00p -4.33%
Virgin Money Holdings (UK) (VM.) 306.70p -3.67%
Auto Trader Group (AUTO) 386.00p -3.67%
BGEO Group (BGEO) 1,748.00p -3.64%
Bellway (BWY) 2,643.00p -3.61%
Hays (HAS) 116.20p -3.41%