London close: Stocks finish higher after BoE decision, US jobs data

London stocks closed firmly in the green on Thursday amid lockdown easing hopes, as investors mulled the latest policy announcement from the Bank of England and digested another week of poor jobs data out of the United States.

The FTSE 100 ended the session up 1.4% at 5,935.98, and the FTSE 250 was 1.66% firmer at 16,247.94.

Sterling was mixed against its major trading pairs, last rising 0.02% on the dollar to $1.2352, while slipping 0.1% on the euro to €1.1427.

Data out during the afternoon showed a continued deterioration in the US jobs market over the latest reference week, although a smidgen less quickly than forecast.

According to the Department of Labor, in seasonally adjusted terms, initial jobless claims surged by a further 3.169 million during the week ending on 2 May.

Consensus expectations were for a leap of 3.25 million.

“If the current rate of decline continues, claims will dip below one million in the second or - more likely - third week of June, though they would remain well above the 665K worst single week after the crash of 2008,”said Ian Shepherdson at Pantheon Macroeconomics.

"The recent data are consistent, we think, with a further 13 million drop in May payrolls after the 22 million plunge we expect to be reported tomorrow for April, but we’re very hopeful that June will see the beginnings of a rebound as states begin to reopen.

“Note that the claims numbers tell us nothing about the pace of gross hiring, so we’ll be largely in the dark about the speed with which firms start to bring back employees.”

Earlier in the day, Bank of England policymakers voted unanimously to keep the main interest rate on hold at a record low of 0.1%, and 7-2 to leave the £645bn bond-buying programme unchanged.

Two members voted to increase the target for the stock of asset purchases by an additional £100bn.

“The headline takeaways are all rather terrifying - a 14% contraction in the UK in 2020, and a 25% slump in the second quarter, with unemployment of 9% fast approaching,” said Spreadex analyst Connor Campbell.

“Globally the central bank is expecting to shrink by 20% in the second quarter.”

Campbell said that crucially, the bank did also state that it expected an “aggressive rebound” in 2021, with growth of as much as 15% in the UK.

“This, combined with the ongoing and prospective lockdown-easing measures around the world - even if the wisdom of such decisions, especially in the US where death is becoming government policy, are questionable - helped the markets tentatively rise after the bell.”

In equity markets, RSA Insurance rallied 6.55% after saying it expects to take a hit of £25m from its exposure to the coronavirus pandemic.

That was lower than analysts were expecting, with RBC Capital Markets having estimated an impact of around £60m.

Phoenix Group was 6.29% higher as it reiterated that it will pay a final dividend for 2019.

Rolls-Royce reversed earlier losses to close up 0.2%, after the aerospace and defence giant signalled there are job cuts ahead as it said the commercial aerospace market could take several years to recover from the impact of Covid-19.

On the downside, BT was 8.04% weaker as it pulled its dividend due to the pandemic and reported a drop in full-year profit and revenue.

British Airways and Iberia owner IAG descended 3.15% after saying it swung to a first-quarter operating loss of €535m. It also warned of a "significantly worse" second quarter due to the pandemic that has grounded most of its fleets.

Market Movers

FTSE 100 (UKX) 5,935.98 1.40%
FTSE 250 (MCX) 16,247.94 1.66%
techMARK (TASX) 3,617.85 1.24%

FTSE 100 - Risers

Anglo American (AAL) 1,467.00p 7.02%
JD Sports Fashion (JD.) 554.20p 6.95%
RSA Insurance Group (RSA) 393.60p 6.55%
Phoenix Group Holdings (PHNX) 605.40p 6.29%
Hargreaves Lansdown (HL.) 1,505.00p 5.58%
Royal Bank of Scotland Group (RBS) 114.10p 5.45%
Aveva Group (AVV) 3,910.00p 5.42%
Informa (INF) 454.30p 5.38%
Experian (EXPN) 2,609.00p 5.30%
Ocado Group (OCDO) 1,869.00p 5.16%

FTSE 100 - Fallers

BT Group (BT.A) 104.95p -8.14%
Admiral Group (ADM) 2,415.00p -3.71%
International Consolidated Airlines Group SA (CDI) (IAG) 190.45p -3.15%
AstraZeneca (AZN) 8,559.00p -3.07%
Rolls-Royce Holdings (RR.) 287.10p -2.25%
Melrose Industries (MRO) 96.00p -2.24%
National Grid (NG.) 921.20p -1.90%
Coca-Cola HBC AG (CDI) (CCH) 1,896.50p -1.63%
Polymetal International (POLY) 1,644.00p -1.59%
ITV (ITV) 73.32p -1.40%

FTSE 250 - Risers

Cineworld Group (CINE) 60.14p 13.90%
Dixons Carphone (DC.) 75.90p 8.35%
Trainline (TRN) 378.00p 8.00%
SSP Group (SSPG) 234.60p 7.91%
Grafton Group Units (GFTU) 621.50p 6.88%
Marks & Spencer Group (MKS) 95.12p 6.78%
Vistry Group (VTY) 810.00p 6.37%
Morgan Sindall Group (MGNS) 1,280.00p 6.14%
Close Brothers Group (CBG) 1,085.00p 6.06%
GVC Holdings (GVC) 792.80p 5.82%

FTSE 250 - Fallers

Hyve Group (HYVE) 18.78p -12.45%
Polypipe Group (PLP) 430.50p -10.68%
TUI AG Reg Shs (DI) (TUI) 265.00p -10.50%
Aston Martin Lagonda Global Holdings (AML) 45.30p -6.29%
Essentra (ESNT) 251.40p -4.63%
Fisher (James) & Sons (FSJ) 1,196.00p -4.17%
National Express Group (NEX) 221.00p -3.91%
Airtel Africa (AAF) 38.05p -3.79%
Watches of Switzerland Group (WOSG) 228.00p -3.59%
GCP Infrastructure Investments Ltd (GCP) 110.20p -3.50%