Markets: FTSE fighting back against US gloom

WEAK jobs data from the United States forced the Footsie into a 60-point post-lunch nose dive yesterday but the index recovered in the afternoon session.

The FTSE 100 ended the day up 7.09 points at 5,855.01, bringing to an end a poor run that saw it shed 142 points during the previous two days.

Will Hedden, sales trader at IG Index, said: "After the initial knee-jerk reaction the FTSE has rebounded well. Many will be hoping that the poor US jobs figures are just a speed bump on the road to recovery, perhaps partly attributable to Japan or unusually high inflation, but the immediate rally in safe-haven assets such as gold suggests that jitters are running deep."

The US labour department said some 54,000 jobs were added in May - only about a third of what had been forecast.

However, the Footsie was boosted after a report from the Institute for Supply Management (ISM) said the US economy's service sector, which employs 90 per cent of America's workforce, grew in May for an 18th straight month.

Upbeat service sector news in the US came in stark contrast to data from the Chartered Institute of Purchasing & Supply's purchasing managers' index, which revealed output in the UK's key services sector had slowed last month.

It was a largely disappointing session for commodity-based stocks following the US jobs data, with BHP Billiton among the fallers with a drop of 21.5p to 2,305.5p.

Commodities trader Glencore led the FTSE 100 fallers' board for a while and was down 5.9p to 505p as sentiment towards the stock remained weak following last month's high-profile flotation at 530p a share.

Key stocks propping up the blue-chip index included Vodafone after a rise of 3.1p to 163.9p, while property firms continued their strong run. With recent full-year results highlighting increased confidence among the major players, British Land lifted 9.5p to 591p, Hammerson added 5.3p to 479p and Land Securities, which has shopping centre interests including Cabot Circus in Bristol and Birmingham's Bullring, cheered 2p to 833p.

Vehicle catalysts and chemicals firm Johnson Matthey also rose, up 39p to 2,052p, recouping some of the losses seen on Thursday in the wake of results showing a 14 per cent rise in profits to 261 million.

Transport stocks set the pace in the FTSE 250 Index after JP Morgan Cazenove upgraded the sector on the back of hopes that better employment prospects in the UK will drive volumes and revenues in both bus and rail.

Southern and Southeastern operator Go-Ahead rose 29p to 1,490p and Perth-based Stagecoach lifted 9p to 249.1p, while Aberdeen's FirstGroup was 1.4p higher at 337.8p.Among the Scottish stocks, Cupid jumped 9.4 per cent or 16.5p to close at 192.5p after the Edinburgh-based dating website operator received share tips in a pair of investors' magazines.

Parkmead, the oil and gas investment vehicle led by former Dana Petroleum boss Tom Cross, rose 6 per cent or 1.13p to close at 19.88p after Aberdeen-based exploration partner Deo said the first oil from its Perth field in the North Sea could flow by 2013. Deo was flat at 44.5p.