Markets edged into positive territory yesterday to break a three-day losing streak, as investors made a cautious return after a turbulent spell of economic data.
The FTSE 100 Index made modest headway to close up 27.2 points at 6276.9, a gain of 0.4 per cent.
Sentiment was rocked at the end of last week by disappointing non-farm payroll figures, which showed US employers added 88,000 jobs in March, far short of the 170,000 to 200,000 expected by economists. That prompted fears the world’s biggest economy’s growth is starting to cool.
European markets slumped on the back of the data, with the FTSE 100 Index slipping to a two-month low on Friday. However, despite a downbeat start by the Dow Jones Industrial Average, European stock markets traded narrowly higher, with the Dax in Frankfurt and the Cac 40 both ending the day in positive territory.
Mike Ingram, market analyst at BGC Partners, said the weak gains suggest the stock market’s bull run is on shaky ground. The FTSE 100 enjoyed its 10th consecutive month of gains in March, but has struggled to make headway this month.
He said: “The risk rally that has propelled markets since mid-2012 is now looking decidedly frothy; recent economic data has mostly disappointed and company earnings present a very mixed bag.
“Central banks’ determination to ‘do whatever it takes’ to underwrite economic recovery looks set to be further tested in the weeks ahead. It may not be enough.”
On the currency markets sterling struggled against the greenback, down 0.6 per cent to make a pound worth $1.52. It was also down 0.6 per cent against the euro, with a pound worth €1.17.
In a quiet session for UK corporate news, airline and travel firms made headway as nervousness over a recent outbreak of deadly bird flu in China began to fade.
Stocks fell sharply on Friday after authorities ordered the slaughter of all poultry at a Shanghai market where the virus was detected.
However there was a recovery for Thomson Holidays owner TUI Travel on the FTSE 100, ahead 3.8p at 302.4p. FTSE 250 rival Thomas Cook added almost two per cent, a gain of 1.9p to 107.7p
Banks were among the stocks under pressure, with Lloyds Banking Group down 0.71p at 46.31p, Royal Bank of Scotland off 3.4p at 266.1p, and Barclays 2.8p down at 277.2p. Marks & Spencer also fell as the City braced itself for another set of poor trading figures in general merchandise on Thursday.
The biggest FTSE 100 risers were Polymetal International up 44p to 882p, Weir Group 92p ahead at 2276p, Tullow Oil up 37p at 1191p and Antofagasta ahead 29.5p at 990.5p.
The biggest fallers on the FTSE 100 were Resolution down 4.5p at 261.4p, Lloyds Banking Group down 0.71p at 46.31p, Royal Bank of Scotland off 3.4p at 266.1p and Centrica down 4.3p at 369.8p.