U.K. stocks closed little changed as U.S. payrolls data that missed forecasts fueled concern that the global economic recovery is faltering, offsetting a European Union agreement on further assistance for Greece.
Rio Tinto Group and Fresnillo Plc led a retreat among mining companies. Go-Ahead Group Plc and Stagecoach Group Plc advanced after JPMorgan Chase & Co. advised buying shares of the biggest bus operators.
The benchmark FTSE 100 Index added 0.1 percent to 5,855.01 at the 4:30 p.m. close in London, paring this week’s decline. The FTSE All-Share Index also advanced 0.1 percent and Ireland’s ISEQ Index fell 0.8 percent.
The FTSE 100 has fallen 1.4 percent this week, its biggest drop in a month, as reports on U.S. employment and factory orders trailed economists’ forecasts and a gauge of Chinese manufacturing expanded at the slowest pace in nine months.
“We feel that the slowdown which we now see is potentially becoming worse than economists have forecast,” Michael Preiss, the chief equity strategist at Standard Chartered Bank said in a Bloomberg Television interview with Linzie Janis from Singapore. “Investors need to reposition their portfolios into lower beta stocks, maybe higher quality, and get into some more defensive sectors like health care, materials and telecoms.”
Preiss said he has cut his 12-month outlook on global equities to “neutral” from “overweight.”
U.K. stocks fell after U.S. payrolls data then recouped losses through the close of trading. U.S. employers in May added the fewest number of workers in eight months and unemployment unexpectedly rose to 9.1 percent, underscoring Federal Reserve concerns the expansion is failing to boost the labor market.
Payrolls increased by a less-than-projected 54,000 last month, after a revised 232,000 gain in April that was smaller than initially estimated, Labor Department figures showed. The median forecast in a Bloomberg News survey called for payrolls to rise 165,000. The jobless rate climbed to the highest level this year from 9 percent a month earlier.
Stocks recouped losses as Luxembourg’s Jean-Claude Juncker, who leads the group of euro-area finance ministers, said the EU will approve further aid for Greece. He made the comments in Luxembourg after meeting with Greek Prime Minister George Papandreou.
Rio Tinto lost 0.8 percent to 4,107.5 pence. Fresnillo retreated 1.7 percent to 1,404 pence.
Intermediate Capital Group lost 6.2 percent to 323.6 pence as Credit Suisse Group AG cut its price estimate to 380 pence from 390 pence and said “headwinds are on the horizon.”
Go-Ahead advanced 2 percent to 1,490 pence and Stagecoach rallied 3.8 percent to 249.1 as JPMorgan rated the shares “overweight” in new coverage.
IP Group Plc rose 1.2 percent to 53.75 pence after saying it will sell 55 million pounds ($90 million) in new stock to accelerate its investment in start-up businesses that are based on discoveries at universities and other research institutions. The shares will be sold at 50 pence each, the company said.