United kingdom Daily news: FTSE CLOSE: Markets fall on disappointing US jobs report; Aviva shares soar on Delta Lloyd deal

FTSE CLOSE: Markets fall on disappointing US jobs report; Aviva shares soar on Delta Lloyd deal

By This Is Money Reporters

PUBLISHED: 02:30 EST, 6 July 2012 | UPDATED: 11:22 EST, 6 July 2012

17.15 (close): World markets fell into the red today after disappointing US jobs data raised concerns over a slowdown in the world's biggest economy.

The FTSE 100 Index closed 30 points lower at 5662.6, while the Dow Jones Industrial Average was down 1.3 per cent in early trading after closely watched figures revealed only 80,000 jobs were created in June, substantially lower than the 100,000 forecast.

The data from the US provides further evidence that the eurozone debt crisis is sapping confidence across the globe after China yesterday cut its interest rate for the second time in a month.

Investors cautious ahead of key U.S. jobs data

International Monetary Fund head Christine Lagarde added to worries, saying the IMF's forecast on global economic growth would be cut next month

In France, the Cac 40 fell 1.9 per cent and Germany's Dax also closed 1.9 per cent lower.

Yesterday's move by the European Central Bank (ECB) to lower its key interest rate saw the euro weaken further, helping the pound hit its highest level against the single currency since November 2008.

Sterling rose a cent to 1.26 euros, but fell to 1.55 US dollars.

On the Footsie, heavily-weighted miners were among the biggest fallers, with Evraz down 5 per cent, or 11.6p at 246.2p.

Meanwhile, the banking sector continued to suffer in the wake of the Libor-fixing scandal, as the SFO's decision to launch a criminal investigation highlighted fears of more revelations to come.

Barclays was down 3.5p to 164.8p and taxpayer-backed Royal Bank of Scotland and Lloyds Banking Group were 5.7p lower at 201.5p and 0.5p to 30.3p respectively.

Retail chain Marks Spencer was 3 per cent lower, down 11.2p at 318p, as analysts braced for a downbeat trading update next week.

Dismal weather is expected to have hit sales of MS summer clothing and experts predict the group may need to revise down its margin guidance if it has had to mark down ranges.

But insurer Aviva was among the biggest risers after it sold half its stake in Dutch rival Delta Lloyd for Â£318million as part of a major turnaround plan.

Shares rose 1 per cent following the successful deal, which kicks off executive chairman John McFarlane's plan to scale back the group following the resignation of chief executive Andrew Moss.

The overhaul announced yesterday will see 16 of 58 divisions exited or wound down.

Shares rose 3.4p to 288p.

In the FTSE 250, construction group Carillion slumped 6 per cent, off 16.5p to 251.4p, after a broker downgrade.

Elsewhere paving stone maker Marshalls fell 8 per cent, dropping 6.9p to 80p, after it reported a Â£10million sales hit from the rainy weather seen since April.

The group warned of job losses as it cuts costs to tackle the sliding sales.

Cast iron cooker firm Aga Rangemaster was also in the red after the group said first half profits would be lower.

Sales are being impacted by 'patchy' consumer demand, according to the group. Shares fell 5.1p to 66.5p.

The biggest Footsie risers were International Consolidated Airlines up 3.5p to 159.2p, SSE ahead 22p to 1416p, Imperial Tobacco up 40p to 2579p and Pennon Group up 11p to 770p.

The biggest Footsie fallers were CRH down 63p to 1151p, Evraz off 11.6p to 246.2p, Kazakhmys down 33p to 725p and Weir Group down 68p to 1547p.

15:00

Disappointing jobs data in the US drove markets lower today after it fuelled fears of a slowdown in the world's biggest economy.

The Dow Jones Industrial Average was down 0.9 per cent in early trading after closely watched figures revealed that only 80,000 jobs were created in June, substantially lower than the 100,000 forecast.

The worrying data saw the FTSE 100 Index extend its earlier falls, down 27.5 points at 5665, while Germany's Dax and France's Cac-40 were down more than 1 per cent.

The data from the US provides further evidence that the eurozone debt crisis is sapping confidence across the globe after China yesterday cut its interest rate for the second time in a month, fuelling fears its economy faces a 'hard landing'.

Heavily-weighted miners were among the biggest fallers, with Kazakhmys down 4 per cent, or 30p at 728p.

Meanwhile, the banking sector continued to suffer in the wake of the Libor-fixing scandal, as the SFO's decision to launch a criminal investigation highlighted fears of more revelations to come.

Barclays was down 4.2p to 164p and taxpayer-backed Royal Bank of Scotland was 5.3p lower at 201.8p.

Retail chain Marks Spencer was 3 per cent lower, down 10.3p at 318.9p, as analysts braced for a downbeat trading update next week.

Dismal weather is expected to have hit sales of MS summer clothing and experts predict the group may need to revise down its margin guidance if it has had to mark down ranges.

But insurer Aviva was among the biggest risers after it sold half its stake in Dutch rival Delta Lloyd for Â£318 million as part of a major turnaround plan.

Shares rose 1 per cent following the successful deal, which kicks off executive chairman John McFarlane's plan to scale back the group following the resignation of chief executive Andrew Moss.

The overhaul announced yesterday will see 16 of 58 divisions exited or wound down.

Shares rose 3.2p to 287.8p.

12:00

The Footsie is treading water - down 4.8 points at 5687.8 - ahead of key jobs data from the US.

The employment figures will provide a clearer picture of whether the US Federal Reserve will boost levels of emergency support for the world's largest economy.

Retail chain Marks Spencer is 2.6 per cent lower, down 8.9p at 320.7p, as analysts braced for a downbeat trading update next week.

Dismal weather is expected to have hit sales of MS summer clothing and experts predict the group may need to revise down its margin guidance if it has had to mark down ranges.

In the FTSE 250, construction group Carillion slumped 5 per cent, off 13.7p to 254.3p, after a broker downgrade.Â

Elsewhere paving stone maker Marshalls fell 8 per cent, dropping 7.1p to 79.8p, after it reported a Â£10 million sales hit from the rainy weather seen since April.

The group warned of job losses as it cuts costs to tackle the sliding sales.

09:00

Insurance giant Aviva soared to the top of the London market today as investors backed a turnaround including a Â£318 million sale of its stake in Dutch insurer Delta Lloyd.

The insurer was nearly 4 per cent higher on the FTSE 100 Index after it confirmed the pricing for the Delta Lloyd deal, which forms part of executive chairman John McFarlane's plan to scale back the group following the resignation of chief executive Andrew Moss.

The wider market was down 12 points to 5681 as traders nervously awaited key jobs data from the US, which will provide a clearer picture of whether the US Federal Reserve will boost levels of emergency support for the world's largest economy.

Moves by central banks to stimulate growth in Europe and Asia - including a Â£50 billion cash injection by the Bank of England - failed to lift markets yesterday as investors saw the raft of activity as a sign the global economy was heading for the rocks.

Gary Jenkins of Swordfish Research said: â€˜Even in the context of the current crisis yesterday was a quite extraordinary day. Three central banks taking action within an hour of one another to try and stimulate the economy and / or boost short term confidence and the market not only shrugged it off but it seemed to actually make matters worse in some areas.â€™

Aviva added 9.7p to 294.3p after Mr McFarlane said a review of 58 divisions had identified 16 weak performers that would be exited or wound down.

Meanwhile, the banking sector continued to suffer in the wake of the Libor-fixing scandal, with Barclays down 1 per cent or 1.3p to 166.9p after agencies Moody's and Standard and Poor's both downgraded their outlook for the bank's credit rating.

And taxpayer-backed Lloyds Banking Group and Royal Bank of Scotland were down 0.1p to 30.7p and 3.3p to 204.3p respectively amid persistent fears that the crisis would spread to other lenders.

08:00

The FTSE 100 fell back as markets opened this morning, with investors cautious ahead of key U.S. jobs data, worried that an encouraging report might lower the chance of another round of policy action in the United States.

Some analysts have upgraded their forecasts for U.S. June non-farm payrolls numbers, due at 1230 GMT, following Thursday's U.S. private sector jobs data which came in much better than expected.

The ADP report showed an addition of 176,000 job last month, against a forecast of 105,000.

Credit Agricole revised its prediction for non-farm payrolls numbers to 135,000 from 100,000, while Goldman Sachs increased its forecast to 125,000 from 75,000. A Thomson Reuters survey published earlier this week had predicted an addition of 90,000 workers.

At 0704 GMT, the FTSE 100 index was down 12.40 points, or 0.2 per cent, at 5,680.23, having closed 0.1 per cent higher yesterday.

Weakness in energy stocks and miners were the main drags on blue chip sentiment as commodity prices fell on demand concerns, with moves by central banks in Europe, Britain, and China on Thursday to loosen monetary policy to boost growth spooking investors who saw the measures as a sign of growing alarm about the global economic slowdown.

British wholesale inflation numbers will be released at 1230 GMT, with PPI input numbers seen falling 2.1 per cent on the month, and PPI input numbers forecast to be down 0.2 per cent.

STOCKS TO WATCH TODAY

AB FOODS, PREMIER FOODS - AB Foods has acquired Elephant Atta, the UK's leading ethnic flour brand from Premier Foods for a cash consideration of Â£34 million.

AGA RANGEMASTER - The cooker maker said overall revenues and operating profits in the first-half, excluding property profits, were slightly lower year-on-year, although the firm continues to expect revenue and profit growth for the full-year, with encouraging progress in key parts of the group offset by tough market conditions.

MARSHALLS - The building products group warned that exceptionally poor working conditions experienced in April 2012 continued through to the end of June, with the weather impact resulting in an estimated reduction in sales in the second-quarter of approximately 10 million pounds. Also, in response to macroeconomic uncertainty, Marchalls is implementing a wide range of contingency measures, with the operational restructuri ng expected to give rise to a one-off cash charge of Â£7 million.

FIBERWEB - The group said its first-half underlying operating profit is expected to be in line with the result for the first-half of 2011 for its continuing business , with the trading trends reported earlier this year having continued, and the current outlook for the full-year remains in line with board expectations.

COASTAL ENERGY - The group said it has signed a small field risk service contract with Petronas.

GCM RESOURCES - Investors chased the coal miner's shares more than 30 per cent higher yesterday on rumours that the Bangladeshi government had acquired a near-30 per cent stake in the firm from Polo Resources, according to the Daily Mail market report.