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FTSE closes higher on back of record employment figure

Published 19/10/2016

File photo dated 20/3/2015 of an information screen displaying the FTSE 100 at the London Stock Exchange, as the owner of the New York Stock Exchange, the Intercontinental Exchange (ICE), has said that it will not pursue a takeover of the London Stock Exchange (LSE).
File photo dated 20/3/2015 of an information screen displaying the FTSE 100 at the London Stock Exchange, as the owner of the New York Stock Exchange, the Intercontinental Exchange (ICE), has said that it will not pursue a takeover of the London Stock Exchange (LSE).

The FTSE 100 closed higher and the pound dipped, as markets digested employment figures and comments from Chancellor Philip Hammond - who said foreign workers would not be barred from the City post-Brexit.

The top tier index reversed early losses to close higher by 0.3% or 21.9 points at 7021.9 points.

The pound was down 0.2% against the US dollar to near 1.227. Sterling also fell 0.2% versus the euro at 1.119.

Appearing at the Treasury Select Committee on Wednesday, Mr Hammond said he was committed to addressing the concerns of the City and the financial services sector during Brexit.

He acknowledged concerns over passporting rights, which allow financial firms to access the EU's single market, and insisted post-Brexit migration curbs would not hit international firms and high-skilled workers.

"I cannot conceive of any circumstance in which we would be using those controls to prevent banks, companies moving highly-qualified, highly-skilled people between different parts of their businesses," he said.

Meanwhile, fresh employment figures showed that the jobless rate held steady at 4.9%, while unemployment rose by 10,000 in the quarter to August to 1.66 million, marking its first jump since the turn of the year.

There are still a record number of people employed across the country. Employment was up by 106,000 in the latest quarter to almost 32 million, the highest since records began in 1971.

Average earnings increased by 2.3% in the year to August, 0.1% down from the previous month.

The French Cac 40 and German Dax both closed higher, up 0.3% and 0.1% respectively.

In oil stocks, Brent crude jumped 1.6% to 52.94 US dollars per barrel after US government data showed commercial crude inventories dropped in the week to October 14. It marked the sixth decline in seven weeks.

In UK stocks, shares in Nurofen-maker Reckitt Benckiser dropped 192p to 7135p after reporting worse-than-expected sales growth following flagging sales of a new f ootcare product and a disinfectant scandal in South Korea.

The firm said like-for-like revenues - which strip out exchange rates, acquisitions and disposals - rose 2% in the three months to the end of September, compared to analyst predictions of a 2.8% rise.

Shares in Travis Perkins closed lower by 66p to 1422p after it announced plans to close more than 30 branches and warned over full-year profits amid "uncertain" trading.

The builders' merchant and Wickes chain owner said it will also close 10 smaller distribution centres and is reviewing its plumbing and heating division. The move is expected to impact 600 jobs across the group

Shares in Hotel Chocolat closed lower by 8p to 235.5p after the AIM-listed confectioner reported a 12% rise in sales to £91.1 million in the year to June 26, with pre-tax profits rising from £2.9 million to £8.2 million.

Foxtons shares closed higher by 2.75p at 97.25p despite reporting a 34% drop in income from property sales to £12.2 million in the three months to September 30 - as total turnover at the London-focused firm fell 13.7% to £37.5 million.

The biggest risers on the FTSE 100 were Burberry Group up 59p at 1462p, Persimmon up 57p at 1778p, Tesco up 6.55p at 214.85p, and Morrison up 6.5p at 229.2p.

The biggest losers on the FTSE 100 were Travis Perkins down 66p at 1422p, Reckitt Benckiser down 192p at 7135p, Hikma Pharmaceuticals down 26p at 1984p, and AstraZeneca down 61.5p at 4940.5p.

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