Employment rise gives Footsie boost

A SURPRISE fall in unemployment helped to boost investor confidence yesterday and allowed the Footsie to recover some of its poise after Tuesday's heavy losses.

The FTSE 100 Index, which had succumbed to profit-taking in the previous session following fresh fears over the scale of Japan's nuclear crisis, closed 45.97 points higher at 6,010.44 – a rise of 0.8 per cent – after the UK unemployment rate fell for the first time in five months.

Jimmy Yates, head of equities at CMC Markets, said: "We're seeing investors buying back in on the dips but the lack of volume remains a concern, suggesting any rally lacks real support."

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 on Tuesday, 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 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 5,205p, Xstrata ahead 3p at 1,468.5p 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 4,408.5p.

Wall Street's Dow Jones Industrial Average was up 0.3 per cent in early trading after the US commerce department said retail sales rose by 0.4 per cent from the previous month. It was the ninth gain in a row.

The latest round of first quarter updates in the US also lifted sentiment after JPMorgan posted profits ahead of market expectations. Chief executive Jamie Dimon said the results reflected a strong quarter in investment banking, offset by the "extraordinarily" high losses the bank continues to suffer on mortgage-related issues.

Net income of $5.6 billion (3.4bn), compared with a figure of $3.3bn a year ago.

UK banks were encouraged by the profits with Barclays 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 per cent or 243p higher to 1,964p.

Buoyed by further strong international growth, Asos expects full-year profits to be towards the top end of market hopes.

Among the Scottish stocks, Dundee-based medical testing kit maker Axis-Shield hit an intra-day high of 339.75p before falling back to close up just 0.25p at 325.25p after a clinical study endorsed one of its products.