Reuters: Hot Stocks: UK's FTSE takes biggest weekly fall since Nov on U.S. jobs tally

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UK's FTSE takes biggest weekly fall since Nov on U.S. jobs tally Apr 5th 2013, 16:23 Fri Apr 5, 2013 12:23pm EDT * FTSE 100 down 1.5 percent after weak U.S. data * Index posts worst week since Nov * Traders say Fed stimulus will support markets * Airlines hit by bird flu concerns By Francesco Canepa April 5 (Reuters) - Britain's top share index posted its worst weekly loss since November after falling for a third straight session on Friday when weak U.S. jobs data dampened expectations of steady recovery in the world's largest economy. But traders said future market falls could be limited by sustained monetary stimulus from the U.S. Federal Reserve, which has been a key driver behind a 25 percent rally in the FTSE 100 since last summer. The index of Britain's 100 largest shares, which derive around a quarter of their earnings from North America, fell 1.5 percent to 6,249 points, taking its weekly loss to 2.5 percent, on news that U.S. employers hired at the slowest pace in nine months in March. The 88,000 new jobs created fell short of the lowest estimate in a Reuters poll of economists and of bearish trader expectations before the release. "At first sight, it's very disappointing but with the Fed determined to keep (its stimulus programme) going until unemployment goes quite a lot lower, that should provide support," Richard Griffiths, associate director at Berkeley Futures, said. The FTSE, which traded as low as 6,214 points after the data, cut losses in late trade. Traders said the Fed would have to keep pumping out money through its bond-buying programme, or quantitative easing (QE). The Fed, which is buying $85 billion of Treasuries and mortgage-backed securities each month to boost growth and hiring, has said it will keep interest rates near zero until the unemployment rate falls to at least 6.5 percent, as long as inflation does not threaten to rise above 2.5 percent. The jobless rate was 7.6 percent in March. "It doesn't matter how bad the news is, people are still finding value (in equities) because, let's face it, the Fed will not be backing down on quantitative easing until the market is self-supporting," Steve Ruffley, market strategist at spreadbetting provider InterTrader, said. "The market has to test the lows before it starts to bounce back but inevitably people will be buying into these low levels." He was waiting for the FTSE to fall to 6,147, the 61.8 percent Fibonacci retracement drawn from a short-term target of 6,538 points. Companies that generate their revenues from travels led fallers on Friday on concerns about a new strain of bird flu which has killed six people in Asia. Airlines IAG and Easyjet fell 6.9 percent and 6.4 percent, with tour operator Tui Travel down 4.7 percent. Volume on IAG was especially high at more than twice its 90-day average. Traders said EasyJet, which confirmed its guidance this morning but flagged some damage from a weak pound, was also prone to profit taking after its shares nearly quadrupled in price since September 2011 to hit a record high earlier this week. (Reporting By Francesco Canepa) Link this Share this Digg this Email Reprints

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