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Latest Market Analysis: BSkyB shares fall on Murdoch fears

Despite a relatively benign start to the day, the week’s end was always going to be dominated by further employment data from the US. The FTSE climbed 0.4% in anticipation of what was expected to be relatively upbeat non-farm payrolls for June, only to whipsaw lower in the afternoon as the figures were released. With payrolls estimated to grow by approximately 100,000, the market was stunned to learn that the US economy only added 18,000 jobs in a month that also saw unemployment increase to 9.2%, the figures being in stark contrast to the private sector data of the previous day. The worst monthly data since September 2010 added to concerns that the US ’s economic woes may be more enduring than previously hoped.

Developments in the Euro zone took another negative turn as the Italian economic minister, a key proponent of budget discipline in an increasingly troubled government, found himself the centre of a corruption scandal. Banks around Europe suffered as bond yields rose along with the cost of insuring against government debt. The FTSE soon found itself down 1%, lead by the major banks and mining companies that had seen healthy gains on a more bullish Thursday.

Shares in BSkyB tumbled as a result of the repercussions surrounding the News of The World hacking scandal. The troubled paper’s parent group, News Corp, had been hoping to gain political support to take over the satellite broadcaster and approval for the deal must now be hanging by a knife edge. Shares in BSkyB ended the day 7.5% lower with a 62p fall to 750p.

Elsewhere Gold rose a further 1% amid safe haven demand to $1542, testing the multi year high of 1549 that was reached in late June.

The FTSE closed 64 points lower on the day, at 5990 and the dramatic end saw the FTSE finish the week relatively unchanged but faring better than the CAC 40 and the DAX (Xetra) which lost 2.4% and 0.5% respectively.

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This was posted in Bdaily's Members' News section by John Dance .