FTSE flat as job figures disappoint

Gold, oil and drug companies dominated the FTSE 100 fallers as official figures showed the number of job seekers was up for the first time since January.

The number of people claiming unemployment benefit in August unexpectedly rose 2,300, having fallen 1,000 in July.

Some analysts say an increased number of job seekers is largely because record numbers are being forced into part-time work after failing to secure full-time jobs. There are fears that the jobs market, which traditionally lags behind the wider economy, is about to show a turn for the worse.

Also today, the governor of the Bank of England is due to address the Trades Unions Congress (TUC). Mervyn King has said that he will not be an apologist for government cuts when he makes his speech. On Monday TUC delegates voted for a joint industrial action if government cuts continue.

The FTSE 100 was hovering at around 5566 points, near yesterday’s close. It was little moved by news from the US, where retail sales data spooked markets and prompted speculation of further quantitative easing by the Federal Reserve. In Asia, the Japanese government made its first foreign exchange intervention in six years in an attempt to weaken the yen against the dollar.  

The largest fallers on the UK's blue chip index included gold producer African Barrick. A number of miners suffered after a negative analyst note from Citigroup shifting recommendations to ‘hold’ from ‘buy’. Its shares are down 2.26%, at 605p.

BP’s shares are also down 1.6% at 408.5p. This morning the Financial Times reported safety failings on the oil company’s North Sea rigs.  

Another significant faller was drug company Astrazeneca, the eighth largest company on the FTSE 100 with a market value of  £74 billion. Its shares were down 1.3% at £33.40 after the company announced that the US Food and Drug Administration had extended the time to complete its review of a New Drug Application for a drug called ticagrelor.

The largest gainer was clothing retailer Next after the group reported revenue up 5% to £1.59 billion in its interim report this morning and pre-tax profits jumped 15% to £213 million. Next shares were up 4.8% at £21.39. Life companies were also up this morning. Standard Life shares were up 2% at 226p.