The FTSE 100 shed 0.4% on Friday to trim its weekly gains to 1.35%.
The blue chip index got a boost from strong manufacturing data and the European Union’s decision to give Ireland a €85 billion rescue package, while facing pressure from speculation that Portugal may soon ask the EU for financial aid and weak US jobs data that were released late in the week.
On Friday, the Labor Department reported that non-farm payrolls added just 39,000, while analysts expected to see a gain of well over 100,000, while initial jobless claims in the US climbed 36,000 to 436,000 with the less volatile four week moving average falling to 431,000.
The unemployment rate surprisingly increased from 9.6% in October to 9.8% in November.
This week’s manufacturing data included an update on the Chicago purchasing managers’ index (PMI), which climbed from 60.6 in October to 62.5 in November.
On Wednesday it was reported that the Markit/CIPS PMI in the UK rose from 55.6 to 58, hitting the highest level since 1994, while China’s PMI advanced from 54.7 in October to 55.2 in November.
Equity markets were in decline at the start of the week after it was reported that Portugal was under pressure to follow Ireland and request financial aid from the European Union to prevent contagion.
Financial Times Deutschland quoted an undisclosed official of Germany’s finance ministry on Friday, who said that a rescue package for Portugal would reduce the chances of Spain taking the same route as a solution to its won debt problems.
This week, Portugal successfully raised €500 million in a successful short term bond sale.
In other news, the European Central Bank (ECB) led its interest rates unchanged, while stating that the current monetary policy will stay in place.