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Markets soar on upbeat US employment data

British Services Purchasing Managers Index posted the strongest gain for 10 months this morning.
Firms in the sector, which dominants the British economy, were much more optimistic in their
outlook and eased fears that Britain may slip back into a technical recession (two quarters of
negative growth). The Markit PMI rose to 56.0 in January from 54.0 in December, way ahead of the
53.5 dip that was anticipated.

The markets were tentative ahead of key employment data from the US, but they needn’t have
been. The market received a significant boost when the data showed that non-farm payrolls had
increased 243,000 in January, the most since April 2011. The figures were far in excess of forecasts
and meant that the total unemployment rate fell from 8.5% to 8.3, the lowest in two years. Adding
to sentiment was the ISM Non-Manufacturing survey, which increased from 52.6 last month to 56.8
in January.

At a company level, Admiral was the biggest gainer on the index, jumping 1040p, or 8.1%, following
an announcement that it had extended its reinsurance partnership without increasing its costs.
British Telecom was also lifted, finishing almost 4% higher, following a strong third quarter earnings
announcement. The FTSE 100 put on 105 points, 1.8%, to finish at 5901.

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