By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- U.K. stocks rose in choppy action on
Friday, as a disappointing U.S. jobs report fueled speculations
that the Federal Reserve may continue its asset purchases for
longer.
Weak trade figures and industrial production data for the U.K.
weighed on sentiment, however.
The FTSE 100 index gained 0.2% to 6,547.33, sending it 2.1%
higher on the week.
The index turned higher in afternoon trade after the U.S. Labor
Department said 169,000 new jobs were added to the economy in
August, below the 173,000 expected by economists surveyed by
MarketWatch. The unemployment rate, meanwhile, ticked down to 7.3%
from 7.4%, but that was because fewer people were looking for
work.
Ahead of the release, investors had speculated the U.S. Federal
Reserve could start scaling back its $85-billion-a-month asset
purchases as soon as September after a recent streak of upbeat
data.
"The momentum in the labor market is uneven at best," said
Lindsey Piegza, chief economist for Sterne Agee, in a note.
"From the Fed's standpoint, tapering plans were predicated on
the economy, specifically the labor market, showing confirmed
improvement. This morning's employment report gave no such
confirmation," she added.
(Read more reactions here:
http://www.marketwatch.com/story/just-enough-to-taper-payrolls-reactions-2013-09-06.)
The gains in London were capped by data from the Office for
National Statistics showing exports to countries outside the
European Union fell at the fastest rate in more than four years in
July. The overall trade deficit on goods was 9.9 billion pounds
($15.45 billion). Additionally, industrial production was flat in
July compared with June.
"The trade figures were disappointing today, with the trade
deficit widening to its highest since October last year as exports
fell sharply," said Rob Wood, chief U.K. economist at Berenberg,
said in a note.
"The trade deficit should gradually improve as euro-zone growth
improves and the U.S. powers ahead in the second half of the year.
Better export prospects should help get firms off the sidelines and
investing in the U.K.," he said.
Mining firms posted some of the biggest gains in the index as
most metals prices moved north. Shares of Antofagasta PLC rose 2%,
Glencore Xstrata PLC (GLCNF) added 0.7% and Anglo American PLC
picked up 0.6%.
Shares of Tullow Oil PLC gained 3.6% after the oil-exploration
firm said the Wisting Central well has made the first ever oil
discovery in the Hoop-Maud Basin in the Barents Sea.
On a more downbeat note, shares of Sage Group PLC dropped 1.8%
after Morgan Stanley cut the software firm to underweight from
equal weight. The analysts said they prefer rival business software
provider SAP AG , given its strong position as market leader.
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