The FTSE 100 trimmed its losses to less than 0.1% on Friday after weak US jobs data increased the possibility of further quantitative easing by the Federal Reserve. The Labor Department reported that non-farm payrolls dropped 95,000 last month in yet another sign that the recovery is running out of steam.
The FTSE 100, which managed to post a 1.15% weekly gain, is currently projected to open 0.2% higher on Monday.
Miners flooded the leaderboard on Friday after precious and base metal prices rallied on the back of the US data.
Lonmin (LON:LMI) and Xstrata (LON:XTA) emerged atop the leaderboard with gains of 4% and 3% respectively. Anglo American (LON:AAL) and Randgold Resources (LON:RRS) added more than 2%. Antofagasta (LON:ANTO), BHP Billiton (LON:BLT) and Rio Tinto (LON:RIO) tacked on nearly 2%.
Sage Group (LON:SGE) was the heaviest faller in the FTSE 100.The software developer dropped 4.5% after UBS downgraded the stock to “sell”, expressing doubts that recent bid speculation will materialise. Microsoft (NYSE:MSFT) was listed among the potential suitors for the company.
Sage wasn’t the only stock to suffer downgrades. Bank of America Merrill Lynch cut silver miner Fresnillo (LON:FRES) from “neutral” to “underperform”, pushing the stock down 3.2%.
Other notable fallers included commercial property company Land Securities (LON:LAND), banking group Barclays (LON:BARC) and defence contractor Cobham (LON:COB), which shed just over 2%.
US stocks were on the rise yesterday. The Dow Jones Industrial Average and the S&P 500 index added 0.5% and 0.6% respectively with the former closing above 11,000 for the first time since early May. The technology heavy NASDAQ composite advanced 0.8%.
Aluminium producer Alcoa (NYSE:AA) rallied 5.7% to lead the Dow Jones constituents after its quarterly earnings beat expectations. Caterpillar (NYSE:CAT) also did well, rising 2%. Procter & Gamble (NYSE:PG) and Walt Disney (NYSE:DIS) each added 1.7%.
Bank of America (NYSE:BAC) and Kraft Foods (NYSE:KFT) were n the red with losses of nearly 1%.
In Asia, Hong Kong’s Hang Seng added 0.25% and China’s Shanghai Composite Index rallied 3.1%, while Japan’s Nikkei 225 index fell 1%, South Korea’s KOSPI and Australia’s S&P/ASX 200 were down 0.2%.
Next week's macroeconomic updates will include minutes from the latest meeting of the Federal Open Markets Committee (FOMC) on Tuesday, an update on US mortgage applications and Treasury budget statement on Wednesday, weekly jobless claims data on Thursday and US retail sales and the University of Michigan consumer confidence index on Friday.