London close: US jobs data boosts Footsie back into the black

London shares clawed their way back into the black on Friday after the release of a stronger-than-expected US jobs report for June.

US non-farm payrolls increased by 222,000 last month, exceeding forecasts for a gain of 177,000. Reinforcing the positive message from the data, estimates for the previous two months were revised higher by a combined 47,000.

"After months of sub-par figures, employment data rebounded, but the rising trend in wage growth from 2015-2017 looks to be at an end. This will no doubt be a problem for the US administration, but also of course for the Federal Reserve, which faces a robust economy, creating plenty of jobs, but with the wage and inflation elements of the picture still absent.

"The doves on the Fed, who made their presence felt in this week’s release of the most recent FOMC minutes, have just been handed further evidence to justify their stance," said Jasper Lawler, senior market analyst at LCG.

The top flight index ended the day 0.19% higher at 7,350.92, while the FTSE 250 edged up by 0.13% to 19,395.14.

That followed early losses in the wake of a sluggish session on Wall Street as geopolitics weighed ahead of the meeting of G20 leaders at the weekend.

Overnight, the S&P 500 endured its biggest drop since mid-May with selling spilling over into the Asian trading session, compounded by the release of disappointing industrial output figures from ONS.

UK industrial production unexpectedly declined 0.1% in May when a 0.4% rise had been expected after the previous month's 0.2% fall, which suggests there will be a further drag on national economic growth for the second quarter of the year.

A 0.2% decline in manufacturing production was the cause, dropping for the second month in a row and coming as the fourth monthly decline in the so far in 2017, and falling short of the market consensus for a 0.5% increase.

While the gloomy reading was bad news for the pound, this was good news for the many FTSE 100 stocks that earn most of their profits overseas.

At the closing bell, Sterling down by 0.69% on its cross against the US dollar to 1.2882.

Sentiment was further being hampered by a renewed drop in oil prices, with Brent shedding 2.9% to $46.76 a barrel on the ICE.

Broker commentary, rumours drive price action

Easyjet flew to the top spot on the leaderoard after being upgraded by Credit Suisse to 'outperform' from 'neutral', with Severn Trent getting a lif as HSBC upped it to 'hold' from 'reduce' and bumped the target price for the shares up to 2,200p from 2,160p.

Second on the leaderboard was Centrica, whose shares were cooking on gas sparked by whispers of a takeover. The British Gas owner has been flagged as a potential target, attracting the attention of a couple of different bidding parties, according to the Wallstreetwires website. SSE was also lifted.

Media players were among the main fallers following a negative note from JP Morgan on the European ad market the day before, alongside a late downgrade on WPP from Exane BNP to 'underperform' due to broadcasters cutting ad guidance. That weighed on the whole media sector in Europe, also sending ITV and Informa into the red.

Elsewhere among company updates, Howden Joinery shares were down slightly after it chief executive Matthew Ingle announced his retirement after 22 years after founding the company. The good news is that it has poached Screwfix boss Andrew Livingston from larger rival Kingfisher to fill the hole. Kingfisher was down 1.2%.

Homewares retailer Dunelm shot up as it revealed total revenue for the fourth quarter rose 17.7% to £240.0m. The FTSE 250 firm said total revenue, excluding Worldstores, rose by 6.7% to £217.4m, with total like-for-like growth - combining LFL stores and home delivery - grew by 3.8%.

Aveva was also higher after the software group said its full year outlook remains in line with management expectations after it made a "solid start" to the financial year.

Shares in defence, security, transport and energy company Ultra Electronics gained even after announcing a conditional merger agreement to acquire New York-listed electromechanical device maker Sparton for $234.8m (£180.6m).

Market Movers

FTSE 100 (UKX) 7,350.92 0.19%
FTSE 250 (MCX) 19,395.14 0.13%
techMARK (TASX) 3,504.22 0.60%

FTSE 100 - Risers

easyJet (EZJ) 1,419.00p 5.35%
Centrica (CNA) 207.70p 2.87%
Rolls-Royce Holdings (RR.) 936.50p 2.29%
International Consolidated Airlines Group SA (CDI) (IAG) 628.00p 2.03%
Severn Trent (SVT) 2,208.00p 1.94%
Shire Plc (SHP) 4,324.50p 1.59%
Carnival (CCL) 5,155.00p 1.48%
SSE (SSE) 1,474.00p 1.45%
Marks & Spencer Group (MKS) 344.50p 1.23%
Unilever (ULVR) 4,178.00p 1.22%

FTSE 100 - Fallers

Royal Mail (RMG) 410.30p -3.35%
ITV (ITV) 176.60p -2.91%
WPP (WPP) 1,569.00p -2.55%
Kingfisher (KGF) 304.90p -1.55%
Informa (INF) 658.00p -1.35%
Taylor Wimpey (TW.) 178.40p -1.16%
Johnson Matthey (JMAT) 2,784.00p -1.14%
Fresnillo (FRES) 1,420.00p -1.11%
Randgold Resources Ltd. (RRS) 6,665.00p -1.04%
Mediclinic International (MDC) 731.00p -1.02%

FTSE 250 - Risers

Computacenter (CCC) 883.00p 4.95%
Entertainment One Limited (ETO) 230.10p 4.07%
Dunelm Group (DNLM) 620.50p 3.85%
ZPG Plc (ZPG) 367.40p 3.43%
CLS Holdings (CLI) 212.80p 2.80%
Sanne Group (SNN) 670.00p 2.38%
Ultra Electronics Holdings (ULE) 2,038.00p 2.36%
Spire Healthcare Group (SPI) 331.10p 2.32%
Pennon Group (PNN) 809.00p 2.21%
Genus (GNS) 1,758.00p 2.20%

FTSE 250 - Fallers

Nostrum Oil & Gas (NOG) 460.00p -3.77%
Aggreko (AGK) 875.00p -3.63%
Petrofac Ltd. (PFC) 441.30p -3.41%
Tullow Oil (TLW) 152.60p -2.86%
Hochschild Mining (HOC) 254.70p -2.53%
Evraz (EVR) 218.20p -2.37%
Hunting (HTG) 486.60p -2.17%
Capita (CPI) 663.00p -2.14%
Rank Group (RNK) 227.30p -2.03%
Man Group (EMG) 152.90p -1.80%