Market regains its poise as fall in unemployment boosts confidence

FTSE:6010,44 (+45.97) Mid-250:11,615.77 (+74.18) Small Cap:3,260.74 (+6.47)

The London market regained its poise yesterday as better-than-expected unemployment figures boosted investor confidence.

The FTSE 100 Index, which succumbed to profit-taking on Tuesday following fresh fears over the scale of Japan’s nuclear crisis, closed 46 points higher at 6010.4 after the UK unemployment rate fell for the first time in five months.

The Office for National Statistics (ONS) said the number of people in work in the UK was at its highest for two years. The jobs data followed a surprise drop in inflation to 4 per cent yesterday, while Britain’s trade deficit shrank by more than expected in February as exports hit a record high for the second month in a row.

The positive jobs outlook boosted the pound, which was up against the US dollar at 1.62 and up against the euro at 1.12.

Rising gold and oil prices gave mining and resources stocks a fillip, with Randgold Resources up 5p at 5205p, Xstrata ahead 3p at 1468.5p and Essar Energy adding 8.7p at 465p.

A 3 per cent drop in global iron ore production at Rio Tinto had earlier threatened to dampen the mood, but with the decline partly due to Australia’s recent flooding the stock held firm with a rise of 5.5p to 4408.5p.

UK banks Barclays were up 4.7p at 308.85p, HSBC ahead 6.7p at 661.6p and Royal Bank of Scotland adding 0.3p at 44.16p.

Attention in London was also focused on the retail sector after updates from fashion chain JD Sports and online fashion firm ASOS.

JD shares came under pressure, falling 64p to 837.5p, after it revealed a 21 per cent jump in full-year profits, but warned that margins were being squeezed by a rise in its costs, which it has struggled to pass on to cash-strapped consumers. ASOS moved in the opposite direction as a better-than-expected fourth quarter sales performance drove shares 14% or 243p higher to 1964p. Buoyed by further strong international growth, ASOS said it expected full-year profits to be towards the top end of market hopes.

The biggest Footsie risers were ARM Holdings up 38p at 598p, Reckitt Benckiser ahead 136p at 3366p, GKN up 6.9p at 203.5p and G4S ahead 7.3p at 268.6p.

The biggest Footsie fallers were Old Mutual down 6.2p at 138.6p, Lonmin off 39p at 1649p, Carnival down 40p at 2436p and IMI off 16p at 995p. – (PA)