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FTSE 100 edges higher despite disappointing US jobs data

Published 06/05/2016

The FTSE 100 Index fell 20.5 points to 6096.7
The FTSE 100 Index fell 20.5 points to 6096.7

The London market ended a bruising week edging higher, despite warnings over global economic uncertainty from Holiday Inn owner InterContinental Hotels Group (IHG) and disappointing US jobs data.

IHG said overall room revenue growth in its first quarter stood at 1.5%, although it was dragged back by weak oil markets, the earlier timing of Easter and political uncertainty in some Middle East markets.

The FTSE 100 Index lifted 8.5 points to 6125.7, despite April seeing the lowest number of new jobs created in the US economy in seven months.

In Europe, Germany's DAX was 0.3% higher, while in France the CAC 40 was down 0.8%.

The London market closed more than 100 points lower, or almost 2%, over the week following a series of softer economic data in Europe, China and the US. Overall European stocks suffered their worst weekly slide in more than two months.

CMC Markets analyst Jasper Lawler said: "Markets had an undistinguished finish to a rough week after data showed US job growth slowed in April, adding to concerns that the global economy has hit a soft patch.

"Feeble economic data from China to Europe to the US has prompted the worst weekly slide in European stocks since mid-February."

The US, the world's largest economy, added 160,000 new jobs last month, below the average increase of 200,000 over the last quarter.

Economists said weak US economic growth may be making some employers more cautious about hiring. However, the unemployment rate remained at a low 5%, roughly where it has been since last autumn.

In London, IHG said revenue from the Middle East was down 10.4%. But the group added that growth in the Americas and Europe remained solid, rising 1.9% and 1.4% respectively.

IHG chief executive Richard Solomons said: "We have made a good start to the year, driving revenue per room up 1.5% against the background of weak oil markets and the earlier timing of Easter, which affected several of our markets."

Shares fell 14p to 2682p.

The biggest faller in the top flight was satellite firm Inmarsat, which fell almost 6%, or 50.5p to 812.5p, after a broker downgrade.

The move comes a day after the technology firm cut its full-year targets to between 1.175 billion US dollars (£814 million) and 1.25 billion (£866 million), due to slowing marine and energy markets. Its previous guidance had been between 1.25 billion (£866 million) and 1.3 billion (£900 million).

FTSE 250 insurer Hastings said that revenues rose 22% to £132.7 million in the first quarter as the firm increased its market share.

The number of customers on its books grew 17% to 2.1 million and Hastings' share of the private car insurance market also increased to 6% from 5.3%.

The company said it is on track to meet targets outlined when it launched its £1.1 billion initial public offering last year.

Shares lifted 0.8p to 176.8p.

The biggest risers in the FTSE 100 Index were Randgold Resources up 380p at 6165p, Fresnillo up 64p at 1103p, Reckitt Benckiser up 47p at 6731p and Wolseley up 39p at 3890p.

The biggest fallers in the FTSE 100 Index were Inmarsat down 50.5p at 812.5p, Shire down 43p to 4009p, Provident Financial down 36p to 2838p and easyJet down 24p at 1416p.

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