FTSE 100 rises but Wall Street falls again on job data
The FTSE 100 reversed yesterday’s losses, closing in on the 5,900 point level this morning despite last night’s ferocious sell-off of US tech stocks dragging markets down overnight.
By the early afternoon London’s premier index was 0.7 per cent up at 5,888.96. The FTSE 250 index of mid caps also rose 0.2 per cent.
However, Wall Street fell again this afternoon on data that showed the rate of people getting back into employment in the US had slowed.
The FTSE’s reverse was led by mining and financial stocks, while the UK’s housebuilders slipped as the Competition and Markets Authority (CMA) launched a probe over suspicions they may have broken consumer protection law in relation to leasehold homes.
It confirmed new enforcement actions focusing on the practices of Barratt Developments, Countryside Properties, Persimmon Homes and Taylor Wimpey, sending stocks down between one and 3.5 per cent across the firms.
Nigel Green, the chief executive of financial services advisory firm De Vere Group, said that investors were taking advantage of the sell-off to top-up their portfolios.
“Savvy investors will be drawn to the massive growth and opportunities that tech offers”, he said.
“With some of the heat being taken out, they will – perhaps more judiciously than before – seek to capitalise on this dip.”
The rebound was apparent across the continent, with Germany’s DAX up 0.1 per cent and the French CAC rising 0.6 per cent.
CMC Markets analyst David Madden said: “Equity markets have clawed back some of the ground that was lost yesterday.
“The mood is relatively upbeat when you take into consideration the horrendous sell off suffered in the US last night.”
Wall Street falls again on jobs data
On Wall Street yesterday tech stocks bore the brunt of the sell-off, with the likes of Apple down eight per cent, Tesla nine per cent, Microsoft six per cent and Amazon five per cent.
The declines continued this afternoon after new data showed that 1.4m more people had returned to employment in the US in August, down from 1.7m the month before.
Although the unemployment rate fell from 10.2 per cent to 8.4 per cent, the slowdown in jobs growth added to fears that the recovery was running out of steam.
The S&P 500 was down 0.3 per cent as trading began, while the tech-heavy Nasdaq dropped 1.5 per cent.
Richard Hunter of Interactive Investor said that the falls were a result of “a bout of healthy profit taking”.
However, he also added that a combination of new figures would have some investors worried that the US’ economic recovery from the coronavirus pandemic was stalling.
“Some disappointment following the ADP payrolls report earlier in the week was compounded by an uncomfortably high jobless claims number, while the service sector rebound also slowed in August”, he said.
The FTSE 100 remains down 23 per cent for the year, despite the positive performance of markets elsewhere around the world.