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Financials rally as FTSE rises on strong U.S. data

Published 05/12/2014, 14:34
© Reuters. A man walks past the London Stock Exchange in the City of London
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By Sudip Kar-Gupta

LONDON (Reuters) - The FTSE 100 bounced back on Friday, with financial stocks among the best performers, as stronger-than-expected U.S. employment data buoyed global stock markets.

U.S. employers added the largest number of workers in nearly three years in November and wages increased, which could bring the Federal Reserve closer to raising interest rates.

Non-farm payrolls surged by 321,000 last month, the most since January 2012, the Labor Department said on Friday, while unemployment held steady at a six-year low of 5.8 percent. Economists polled by Reuters had forecast payrolls increasing by only 230,000 last month.

The U.S. data pushed Britain's blue-chip FTSE 100 index (FTSE) higher. The FTSE, which had fallen 0.6 percent on Thursday, was up by 0.8 percent at 6,734.82 points going into the close of the trading session.

Financials gave the biggest lift to the index, with wealth management company St James's Place (L:SJP) rising 3.2 percent, since such investment groups can often bring in more client money on signs of robust stock markets.

Intertek (L:ITRK), whose services include conducting tests on products to make sure they comply with safety standards, also rose 2.8 percent, after upgrades from Deutsche Bank and UBS.

"The U.S. jobs data were a strong set of numbers," said Hantec Markets analyst Richard Perry.

Dafydd Davies, partner at Charles Hanover Investments, expected the FTSE 100 to have a strong end to the year.

"We'd still be looking to buy on the dip, and for the market to have a good run up to the end of the year. The FTSE should get over 6,800 points, maybe even over 6,900 points," he said.

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(Additional reporting by Atul Prakash; Editing by Catherine Evans)

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