London close: Stocks gain as disappointing non-farm payrolls push back rate hike forecasts

UK stocks ended higher on Friday after a disappointing US non-farm payrolls report pushed back expectations for an interest rate hike.

Non-farm payrolls rose 142,000 in September, falling well short of analysts’ estimates for a 201,000 increase, the Labor Department revealed. August was also revised to 136,000 jobs, down from a preliminary estimate of 173,000.

The unemployment rate was unchanged at 5.1% in September, as expected. Average hourly earnings rose 2.2% in September, the same rate of growth as in the previous month and below forecasts for a 2.4% increase.

“While it’s always important not to over-react to one single data release, we’ll make an exception in this case,” said Paul Ashworth, chief US economist at Capital Economics.

“The chances of a rate hike by the Fed this year just went way down,” he added, saying he expects the central bank will wait until early 2016 for an increase.

Before toady´s release, Federal Reserve chair Janet Yellen had said policymakers expected a rate rise this year. The Fed meets on 27-28 October and again in December.

The non-farm payrolls report was followed by weak US factory orders figures. According to the Commerce Department, factory orders declined 1.7% in August, compared with analysts’ expectations for a 1.3% drop.

Closer to home and in more positive news, data showed UK construction activity improved more than expected in September.

The headline seasonally-adjusted Markit/CIPS UK purchasing managers’ index climbed from 57.3 in August to 59.9 last month, well above the 57.5 analysts had expected and the long-run survey average of 54.7. A reading above 50 signals expansion.

In corporate news, banks rallied after news the Financial Conduct Authority is considering a deadline of spring 2018 for any final payment protection insurance claims being lodged. Standard Chartered and Lloyds were among the risers.

Mining companies Fresnillo, Glencore and Randgold Resources also flourished as gold rose to previous levels and other precious metals gained following the non-farm payrolls report.

Legal & General jumped after saying it will provide retirement payments under a group annuity contract to 14,000 Royal Philips US retirees and other former employees in its first American pension risk transfer deal.

Experian declined after it was hacked, exposing the private information of T-Mobile customers and potential customers in the US.

FirstGroup reversed earlier gains after saying overall trading is in line with management’s expectations and its multi-year transformation plans continue to progress, despite a more challenging trading environment in some of the group’s markets.

Paragon Group advanced after buying Five Arrows Leasing Group through its subsidiary Paragon Bank for £117m.

Market Movers

techMARK 3,017.91 +0.25%

FTSE 100 6,129.98 +0.95%

FTSE 250 16,796.08 +0.19%

FTSE 100 - Risers

Fresnillo (FRES) 633.50p +4.80%

Glencore (GLEN) 95.00p +4.37%

Randgold Resources Ltd. (RRS) 4,098.00p +4.22%

Aberdeen Asset Management (ADN) 306.50p +3.34%

Standard Chartered (STAN) 666.70p +2.92%

Aviva (AV.) 462.00p +2.74%

BP (BP.) 351.45p +2.69%

Rolls-Royce Holdings (RR.) 704.50p +2.62%

Legal & General Group (LGEN) 242.70p +2.58%

BG Group (BG.) 987.80p +2.46%

FTSE 100 - Fallers

Experian (EXPN) 1,034.00p -3.81%

Wolseley (WOS) 3,677.00p -2.78%

Persimmon (PSN) 2,003.00p -1.67%

International Consolidated Airlines Group SA (CDI) (IAG) 571.00p -1.55%

Berkeley Group Holdings (The) (BKG) 3,328.00p -1.48%

Barratt Developments (BDEV) 636.50p -1.39%

Carnival (CCL) 3,367.00p -1.38%

Travis Perkins (TPK) 1,951.00p -1.27%

CRH (CRH) 1,711.00p -0.98%

easyJet (EZJ) 1,748.00p -0.96%

FTSE 250 - Risers

Nostrum Oil & Gas (NOG) 527.00p +13.58%

Paragon Group Of Companies (PAG) 434.60p +10.08%

Petra Diamonds Ltd.(DI) (PDL) 86.65p +5.93%

Synergy Health (SYR) 2,249.00p +5.09%

Greencore Group (GNC) 293.50p +5.05%

Evraz (EVR) 78.90p +4.85%

Tullow Oil (TLW) 192.80p +3.99%

Weir Group (WEIR) 1,224.00p +3.64%

Morgan Advanced Materials (MGAM) 291.90p +3.47%

Clarkson (CKN) 2,281.00p +3.03%

FTSE 250 - Fallers

OneSavings Bank (OSB) 357.70p -6.24%

CLS Holdings (CLI) 1,829.00p -4.34%

AO World (AO.) 163.00p -2.98%

Crest Nicholson Holdings (CRST) 556.00p -2.97%

Bovis Homes Group (BVS) 994.00p -2.93%

Bellway (BWY) 2,458.00p -2.69%

Electrocomponents (ECM) 175.30p -2.56%

Card Factory (CARD) 386.00p -2.50%

Pace (PIC) 354.10p -2.48%

Redrow (RDW) 451.10p -2.38%

FTSE TechMARK - Risers

SDL (SDL) 361.25p +11.58%

DRS Data & Research Services (DRS) 12.75p +6.25%

Filtronic (FTC) 6.50p +4.00%

Skyepharma (SKP) 345.00p +2.45%

Oxford Biomedica (OXB) 7.89p +1.68%

RM (RM.) 167.00p +1.21%

Sarossa (SARS) 1.91p +1.06%

KCOM Group (KCOM) 90.50p +0.84%

NCC Group (NCC) 277.50p +0.63%

Dialight (DIA) 675.50p +0.45%

FTSE TechMARK - Fallers

Oxford Instruments (OXIG) 566.50p -2.41%

XP Power Ltd. (DI) (XPP) 1,625.00p -0.91%

Ricardo (RCDO) 885.00p -0.84%

Torotrak (TRK) 6.78p -0.66%

Sepura (SEPU) 174.00p -0.43%

Consort Medical (CSRT) 928.50p -0.43%

E2V Technologies (E2V) 226.50p -0.22%