UK stocks rebounded this afternoon after US non-farm payrolls data topped expectations and Greece secured a debt restructuring deal with its private creditors, lifting demand for riskier assets. The FTSE 100 stood at 5,876, up 17 points (0.3 percent) from Thursday’s close.
The Department of Labor reported that the US economy created 227,000 jobs in February, while expectations were for a 210,000 gain, in another sign that the job market recovery in the US is picking up speed.
In addition, the estimate for the precious two months was revised upwards by over 60,000 and the rate of unemployment rate held steady at 8.3 percent, a three year low.
Likewise, today’s news flow from Europe has been positive with Greece announcing that the participation rate in the private sector involvement (PSI) agreement reached 95.7 percent after collective action clauses were activated.
The deal reduces Greece’s debt pile by more than €100 billion and enables it to receive the second tranche of financial aid to remain solvent and stay in the euro zone.
Earlier this week, the Institute of International Finance (IIF), which represents Greece’s private bondholders, said a Greek bankruptcy could cost the monetary union €1 trillion.
“The debt swap is all about getting Greek debt down to sustainable levels, which is far from certain and there may need to be further bailouts/ debt swap deals down the line,” said analyst at forex.com Kathleen Brooks.
The US jobs data and the Greek debt swap agreement more than offset today’s disappointing UK industrial production data for January, which revealed a 0.4 percent drop.
Aggreko (LON:AGK, up 3.5pct at 2,302p) topped the FTSE 100 leaderboard after reporting better than expected full year results.
Investors also bought property companies including Land Securities Group (LON:LAND, up 2.9pct at 721p) and British Land (LON:BLND, up 2.6pct at 490.5p).
Other notable risers included safety and quality services firm Intertek (LON:ITRK, up 2.9pct at 2,454p) and Indian power firm Essar Energy (LON:ESSR, up 2.7pct at 111.9p).
Meanwhile, silver miner Fresnillo (LON:FRES, down 2.6pct at 1,776p) slid to the bottom of the FTSE 100 pile after Deutsche Bank reduced its recommendation on the stock to ‘hold’ from ‘buy’.
US markets
Equities on Wall Street were off to a positive start this morning on the back of the forecast beating jobs report.
The Dow Jones Industrial Average (DJIA) advanced 30 points (0.25 percent) to 12,937 in early trade and the broader S&P 500 index climbing four points (0.3 percent) to 1,370.
In other news in the US, America’s trade deficit ballooned to US$52.6 billion in January from US$50.4 billion in the previous month, a report from the Commerce Department showed.