London close: Stocks slightly higher as US nonfarms disappoint

The FTSE 100 ended the session up 0.24% at 6,873.26, and the FTSE 250 was 0.26% firmer at 21,064.24.

Sterling was in the green as well, last rising 0.1% against the dollar to $1.3581, and advancing 0.27% on the euro to €1.1086.

“Stock markets are set to close a little higher following the mixed US non-farm payrolls report,” said CMC Markets analyst David Madden.

“The headline reading caught many by surprise as 140,000 jobs were lost last month, while the consensus estimate was 77,000.”

Madden said that initially, traders were spooked as it was the first negative reading in eight months.

“As the full details of the report were digested, it became apparent that things were not as bad as first seemed.”

The data showed that US nonfarm payrolls fell by 140,000 in December, missing market expectations for an increase of 71,000 by a considerable margin.

Last month's decline, driven by a 498,000 drop in employment in the leisure and hospitality sector, followed an increase in November's reading of 336,000.

The report also revealed that the unemployment rate stayed unchanged at 6.7%, while average hourly earnings rose by 0.8% on a monthly basis, compared to analysts' estimate of 0.2%.

Finally, the labour force participation rate remained flat at 61.5% and the average workweek for all employees on private nonfarm payrolls dipped by just 0.1 hours to 34.7 in December

“After several months of encouraging improvement, the closely watched employment data coming out of the US has significantly slumped,” said Robert Alster, chief investment officer at Close Brothers Asset Management.

“The double whammy of Thanksgiving and Christmas celebrations propelled coronavirus cases and consequently, restrictions were reintroduced in many states, hindering many businesses on the road to recovery.”

In equity markets, housebuilders were among the big winners after Barratt Developments said it planned to restart dividends as it reported strong trading in the first half.

Forward sales in the six months to the end of December rose 14.3% to 13,588 homes from a year earlier at a value of £3.2bn - up 19.4%.

Barratt rallied 4.5%, as Taylor Wimpey rose 2.73%, Persimmon advanced 2.39%, Crest Nicholson added 5/57% and Vistry gained 3.61%.

Investment platform Hargreaves Lansdown was lifted 5.41% by an upgrade to 'buy' at Shore Capital and as Barclays reiterated its 'overweight'.

Rentokil Initial was also on the front foot by 2.81%, after saying that annual results would be slightly better than expectations but warning the outlook was uncertain because of uncertainty over one-off disinfection sales.

Pets at Home advanced 6.73% as it upgraded its full-year profit guidance following strong sales growth in December.

Energean was boosted 1.55% by an upgrade to ‘outperform’ from ‘sector perform’.

Shipping services firm Clarkson also gained, rising 2.15% as it said that full-year underlying profit for 2020 is expected to be ahead of market consensus, at between £42m and £45m.

On the downside, Signature Aviation fell 2.91%, having risen sharply on Thursday, after it confirmed it had received an approach from private equity firm Carlyle Investment Management regarding a possible offer for the company.

High street stalwart Marks & Spencer was 2.44% weaker after it reported a fall third-quarter revenue as it warned the latest UK Covid-19 lockdown would hit sales and the Brexit trade deal "significantly impact" some of its European operations.

Like-for-like revenue in the 13 weeks to December 26 fell 7.6% to £2.5bn with a 4.4% rise in food sales over the festive period offset by a 24.1% slump in clothing and homewares.

Market Movers

FTSE 100 (UKX) 6,873.26 0.24%
FTSE 250 (MCX) 21,064.24 0.26%
techMARK (TASX) 4,189.30 -0.15%

FTSE 100 - Risers

Hargreaves Lansdown (HL.) 1,657.00p 5.41%
Barratt Developments (BDEV) 720.00p 4.50%
Ocado Group (OCDO) 2,481.00p 4.29%
Compass Group (CPG) 1,466.00p 3.71%
Just Eat Takeaway.Com N.V. (CDI) (JET) 8,992.00p 3.50%
Aveva Group (AVV) 3,531.00p 2.97%
Rentokil Initial (RTO) 545.20p 2.75%
Ferguson (FERG) 9,458.00p 2.74%
Taylor Wimpey (TW.) 169.45p 2.73%
Avast (AVST) 548.00p 2.53%

FTSE 100 - Fallers

Fresnillo (FRES) 1,205.50p -3.45%
Rolls-Royce Holdings (RR.) 107.40p -3.33%
Polymetal International (POLY) 1,768.00p -3.10%
BT Group (BT.A) 143.00p -2.62%
CRH (CRH) 3,422.00p -2.34%
Sainsbury (J) (SBRY) 242.90p -2.25%
3i Group (III) 1,170.00p -2.13%
Vodafone Group (VOD) 128.44p -2.07%
Barclays (BARC) 153.02p -1.99%
Evraz (EVR) 516.00p -1.71%

FTSE 250 - Risers

XP Power Ltd. (DI) (XPP) 5,080.00p 6.05%
Mitchells & Butlers (MAB) 241.50p 5.65%
Crest Nicholson Holdings (CRST) 325.20p 5.57%
Watches of Switzerland Group (WOSG) 611.00p 5.17%
Wetherspoon (J.D.) (JDW) 1,123.00p 4.76%
Avon Rubber (AVON) 3,495.00p 4.33%
Pets at Home Group (PETS) 435.00p 4.17%
Essentra (ESNT) 331.00p 3.96%
Premier Foods (PFD) 106.60p 3.70%
National Express Group (NEX) 264.00p 3.69%

FTSE 250 - Fallers

TUI AG Reg Shs (DI) (TUI) 380.00p -21.96%
Hochschild Mining (HOC) 218.20p -4.47%
Petropavlovsk (POG) 32.35p -4.01%
Provident Financial (PFG) 313.00p -3.21%
Centamin (DI) (CEY) 129.15p -3.19%
Sanne Group (SNN) 616.00p -2.99%
RHI Magnesita N.V. (DI) (RHIM) 3,642.00p -2.88%
Oxford Biomedica (OXB) 981.00p -2.87%
Signature Aviation (SIG) 406.00p -2.85%
Meggitt (MGGT) 449.20p -2.58%