Stocks took back some gains at the opening bell on Friday after the U.S. Labor Department’s release of the latest employment data. The October jobs report showed employers added 214,000 jobs last month, this is slightly below expectations. But the unemployment rate unexpectedly fell to 5.8%.
A lack of action by Europe’s central banks left London shares treading water on Thursday, although supermarkets provided a boost.
Following the ECB’s monetary policy meeting yesterday Mario Draghi, as head of the bank said, ‘the Governing Council has tasked ECB staff and the relevant committees with ensuring the timely preparation of further measures to be implemented’. The Peoples Bank of China yesterday also admitted to using unconventional monetary policy tools, injecting 500 billion Yuan in September and another 269 billion in October of three-month money at 3.5 per cent while keeping other interest rates unchanged.
The Bank of England also decided to keep interest rates at 0.5% and asset purchases at £375bn, as predicted by analysts.
Economists said it was not surprising the Bank’s Monetary Policy Committee (MPC) kept interest rates steady at its November meeting amid growing signs that the UK’s fragile economic is running out of steam.
Analysts forecast that UK rates were unlikely to rise until the middle of next year at the earliest.
Lower forecasts for GDP growth and consumer price inflation are holding back interest rate rises.
The oil price has been on the back foot for several months now. The OPEC secretary-general Abdalla Salem el-Badri says, ‘the fundamentals do not really deserve (a 28 per cent) decline in price. Oversupply in the market is not really that much. We are looking at speculation’. President Putin added ‘at some moments of crisis it starts to feel like it is the politics that prevails in the pricing of energy resources’.
Markets shrugged off fresh economic woes and gold price falls, the FTSE 100 Index raced ahead 85.17 points to 6539.14 as M&S posted a rise in underlying first-half profit for the first time in four years, raised guidance on its non-food gross margin for 2014-15 and hiked its dividend.
This buoyed other retail stocks, despite British Retail Consortium data showing UK shop prices were down a below-forecast 1.9% on the year in October.