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LSE: FTSE falls as U.S. payrolls miss expectations |
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By David Brett
LONDON, June 4 (Reuters) - Britain's top shares fell sharply
on Friday as U.S. job data disappointed, adding to the downbeat
sentiment after Europe's debt worries resurfaced with the focus
on French bank Societe Generale and Hungary's economy.
The FTSE 100 ended down 85.18 points, or 1.6
percent, at 5,126.00, well off the week's high of 5,262.50.
The U.S. non-farm payrolls rose just 431,000 in May compared
to an estimate of 513,000, according to a Reuters poll. The
figure was made worse after United States President Barack Obama
had built up market hopes of a bumper figure on Wednesday.
Adding to the misery, U.S. private employers hired fewer
workers than expected in May, a setback for the labour market
recovery.
'Today's jobs data is a blow to recovery enthusiasts, Joshua
Raymond, market strategist at City Index said.
'Instead of looking at the biggest monthly jobs growth in
the last 26 years, investors are now left questioning whether
the labour market recovery is starting to slow down and how this
could ultimately impact US growth.'
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Graphic showing change in U.S. non-farm payrolls
http://r.reuters.com/dyr28k
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Those growth fears hit commodities and commodity-linked
stocks, with metal prices down across the board as demand
sentiment was dented.
Miners Lomin and Vedanta were two of the
biggest fallers in the sector, down 4 and 5.2 percent
respectively.
Energy shares also retreated along with crude, which
fell 2 percent. Royal Dutch Shell dropped 1.7 percent,
while BG Group shed 1.0 percent.
BP, however, held on to gains, up 0.3 percent, but
well down from session highs.
Investors' confidence in the company was boosted after it's
containment cap over the stricken Gulf of Mexico well began
collecting about 1,000 barrels per day, and the company resisted
political pressure to stop dividend payouts.
EURO DEBT FEARS
UK banks reversed earlier gains with traders concerned over
French peer Societe Generale's derivatives operations, although
some traders said the speculation might be spurious.
A Societe Generale spokeswoman said the bank had nothing to
say on the market talk.
Barclays, HSBC, Standard Chartered , Royal Bank of Scotland and Lloyds Banking
Group shed 1.5 to 4.7 percent.
Investors' anxiety increased after a spokesman for the
Hungarian Prime Minister Viktor Orban supported the view that
his country had only a slim chance of avoiding a Greek-style
debt crisis.
The new government, which was
sworn in less than a week ago,
said it would soon announce an action plan to tackle the
economy's problems, after it publishes the figures about the
'true' state of the 2010 budget this coming weekend or early
next week.
(Graphics by Scott Barber; Editing by Sharon Lindores)
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