By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- Shares of BT Group PLC rose in an upbeat
U.K. market on Friday, with the broader market cheering
better-than-expected nonfarm payrolls data from the U.S.
The FTSE 100 rallied 1.2% to 6,411.99, but closed out the week
2.6% lower.
Shares of BT Group (BT) climbed 3.7% after Barclays lifted the
telecom firm to overweight from equal weight, citing improving
operational performance and continued cost cutting.
Shares of Vodafone Group PLC (VOD) added 2%.
Shares of Glencore Xstrata PLC picked up 1.3% after Credit
Suisse added the mining firm to its focus list.
Other mining firms were also higher, with shares of Rio Tinto
PLC (RIO) up 2.2% and BHP Billiton PLC (BHP) 0.6% higher.
The broader U.K. stock market was sent firmly higher in the
afternoon, after U.S. nonfarm payrolls data showed the economy
added 175,000 jobs in May, ahead of the 164,000 expected by
analysts polled by MarketWatch. The unemployment rate, however,
ticked up to 7.6% from 7.5%, as more people entered the workforce
in search of a job.
Analysts worried ahead of the data that a strong reading would
trigger the U.S. Federal Reserve to soon scale back its bond
purchases, but the readings were widely interpreted as being weak
enough to strengthen the case for continued easing.
"As the labor market often lags behind changes in output, the
case for scaling back policy stimulus is by no means clear cut,"
said Chris Williamson, chief economist at Markit, in a note.
"The Fed is likely to watch the incoming data flow on business
activity and demand closely over the coming months before making
clear signals on policy changes, and will probably want to see the
actual rate of unemployment come down further before being
comfortable that a meaningful and sustainable recovery is in
place," he added.
Banks moved higher after the data, with Royal Bank of Scotland
Group PLC (RBS) 3.3% higher, Barclays PLC (BCS) up 1.5% and
heavyweight HSBC Holdings PLC (HBC) rising 1.1%.
Shares of Severn Trent PLC climbed 2.5%, after a multinational
consortium of funds raised its offer for the water-utility firm, in
its third attempt in less than a month to take the company
private.
Insurance firms were also among notable gainers after Citigroup
lifted the financial-services sector to overweight from neutral.
Prudential PLC gained 5.5% and Standard Life PLC picked up
3.2%.
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