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Advertisement

 
LSE: FTSE falls as U.S. payrolls miss expectations
 
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.'

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

Graphic showing change in U.S. non-farm payrolls

http://r.reuters.com/dyr28k

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

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)

Source