Traders were unimpressed with the latest jobs numbers to come out of the US on Friday afternoon, sending the FTSE 100 into the red.
The FTSE 100 index closed down 10.27 points, or 0.1%, at 7,587.85 – although the falls were offset with a strong showing by airline groups, which enjoyed boosts after a Ryanair profit upgrade.
Fiona Cincotta, financial analyst at City Index, explained: “US jobs growth was weaker than expected in December and 2019 was the weakest year for jobs growth since 2011.
“Wages were a clear disappointment at the weakest level since July 2018. There is still little sign of labour costs being pushed higher, which could weigh on consumer spending in 2020 potentially leading to a disappointing economic growth.”
But the falls were offset by hopes for next week’s US-China trade deal signing and the continued cooling off between the US and Iran.
Josh Mahony, senior market analyst at IG, said: “While we have seen a clear shift away from the US-Iran story, today’s jobs report has seen the stock market rally hit the buffers.
“However, with a week ahead that will be dominated by Wednesday’s US-China signing ceremony, President Donald Trump looks likely to take centre stage once again in a bid to bolster market confidence.”
US Treasury Secretary Steven Mnuchin announced fresh sanctions against eight top Iranian officials, but traders appeared calmed that politicians are moving towards diplomatic solutions.
In company news, Ryanair’s profit upgrade – with bosses revealing a strong festive season – helped rivals.
Investors hoped the festive cheer, and extra travellers, spread to rivals, sending shares in British Airways owner IAG up 29.4p to 664p; EasyJet up 60.5p at 1,499p and Wizz Air up 261p to 4,119p.
Aston Martin Lagonda, the struggling carmaker, saw its shares close up 62.4p, or 15.3%, to 469.7p following reports in the Financial Times late on Friday that Volvo owner Geely is considering an investment. Shares took a battering earlier in the week after the company issued a profit warning.
Several retailers put out their Christmas results, including a handful of listed businesses, as investors start to see who the winners and losers are from the period.
B&M Bargains closed down 24.2p to 373p as investors appeared unimpressed with just a 0.3% sales uptick over the 13 weeks to December 13 compared with last year.
Bosses said the modest growth came amid “a challenging broader retail market”, while the company also decided “not to engage in any early discounting activity”.
Fashion chain Joules also unveiled a disappointing set of festive figures, with a warning that profits would slide following supply chain issues over the key Christmas trading period.
Sales in the seven weeks to January 5 dropped 4.5%, falling significantly short of expectations and Christmas sales growth of 11.7% in the same period a year ago. Shares plunged 48p, or 21.2%, to 178p.
Superdry also issued a profit warning, as founder Julian Dunkerton gets to grips with the business after retaking control of the boardroom last year. Shares closed down 31.8p at 440p.
But there was better news at JD Sports, which said annual profits are expected to be at the higher end of forecasts after posting “encouraging” sales growth over the Christmas period. Shares closed up 4.6p at 832p.
The biggest risers on the FTSE 100 were International Consolidated Airlines Group up 29.4p at 664p; EasyJet up 60.5p at 1,499p; Polymetal International up 25p at 1,234p; Just Eat up 17p at 901p; and Coca Cola HBC up 34p at 2,661p.
The biggest fallers were Kingfisher down 7.1p at 210.4p; Hargreaves Lansdown down 48.5p at 1,844.5p; Lloyds Banking Group down 1.52p at 60.33p; Morrisons down 4.65p at 187.9p and Centrica down 1.76p at 85.74p.