Page last updated at 21:49 GMT, Friday, 7 August 2009 22:49 UK

Shares surge on US jobless data

FTSE 100 board
The FTSE 100 has risen on the back of strong corporate results

Leading US and UK shares closed at their highest levels since last year after better-than-expected US jobless data boosted investor confidence.

The US's Dow Jones index jumped 114 points, or 1.2%, to close at 9,370.07, its highest level since early November.

The UK's FTSE 100 index finished up 41 points, or 0.9%, at 4,731.56 - its highest close since early October.

Official figures showed that 247,000 US workers lost their jobs in July, far fewer than analysts had expected.

'Due a break'

With fewer workers being laid off, the unemployment rate fell to 9.4%, down from 9.5% in the previous month - the first drop since April 2008.

The unexpected fall fuelled hopes of an economic recovery.

The Dow finished higher for the fourth straight week, buoyed not only by the jobless data but also by encouraging manufacturing and home sales figures released earlier in the week.

But analysts warned that the markets may be getting ahead of themselves.

"We've run very fast, very quickly. I think we're due a break," said Marc Harris at RBC Capital Markets.

Elsewhere, France's Cac 40 index rose 1.3% and Germany's Dax climbed 1.7%.


In the UK, the US unemployment figures sparked a rally in the FTSE.

The index had spent most of the day in negative territory following downbeat results from Royal Bank of Scotland.

RBS shares fell 12.1% after the bank said it had made just £15m this year.

The results, which the bank described as poor, showed £7.5bn in write-offs such as bad debts.

Chief executive also said that write-offs would remain high "for a while".

UK shares have risen this week after strong results from HSBC and Barclays banks, and figures from Lloyds Banking Group that met with expectations.

They were also buoyed by the news that the Bank of England will pump another £50bn into the UK economy.

However, analysts were not optimistic that the rebound in share prices would continue.

"The best we could hope for in the UK is a consolidation around the 4,500 level. We don't see a tremendous amount of short-term upside from where we are now," said Tim Whitehead at Redmayne Bentley.

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FTSE 100
22.84 0.42%
18.55 0.32%
Cac 40
14.37 0.38%
Dow Jones
78.53 0.76%
35.31 1.58%
Data delayed by at least 15 minutes

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