A BRITISH equity market basking in the warm glow of a recovering FTSE 100 future and a quietly confident gilts market was hit by a bombshell from across the Atlantic yesterday in the form of a much stronger than expected US non-farm payroll report for June.
The FTSE 100 index was left nursing a 17.4 loss at 3,743.2, after reaching extremes of 3,790.0 and 3,729.6.
At its best, the index came within 69 points of its all time intra day record and 67.1 of its closing peak. Over the week the index rose 32.2.
The action in the FTSE Mid 250 was much more subdued. The index closed only 3.9 off at 4,367.2, having been over 11 points higher in mid session, to post a rise of 14.0 on the week.
The US news, which showed a 239,000 jump in new jobs in the US and an upward revision from 348,000 to 365,000 in the May report, as well as a worrying rise in hourly earnings, was immediately followed by a two point slide in US Treasury bonds. The yield on the long bond was propelled through the 7 per cent level.
British gilts followed Treasury bonds lower and London's equity market, which earlier in the session had built on Thursday's big recovery in confidence in the FTSE 100 future, promptly went into a sharp reverse. Up just short of 30 points at its best, just before midday, the cash index lost all of its hard won gains within 10 minutes of the payroll report being published and quickly went on to post a 31 point fall.
