London shares rise

London shares rebounded strongly on Friday as better-than-expected US jobs data added to early gains made on a more positive view of the European Central Bank's stand on the eurozone debt crisis.

The FTSE 100 index was up 2.21 percent at 5,787.28 points.

"Mario Draghi may have proved to be something of a let-down yesterday but thankfully the monthly non-farm payrolls report has provided the necessary boost to finish the week on a strong note," said Chris Beauchamp, Market Analyst at IG Index.

"After three consecutive misses for non-farm payrolls, the July report breezed past forecasts, with the US economy adding 163,000 versus an expected 100,000," he added.

Investors welcomed the improvement in the US jobs data in July which showed the strongest gain since February.

"These are good data. Not great, but good," said Dick Green at Briefing.com.

"Yesterday's... selling helped remove some of the froth from risk assets ahead of today's critical US jobs number," said Spreadex trader David White.

The ECB sparked a heavy global sell-off Thursday when head Mario Draghi announced no immediate measures to bring down dangerously high borrowing costs for some eurozone states, disappointing markets primed for action.

However, by Friday, analyst comment on Draghi's comments had turned more positive, suggesting that the ECB and eurozone governments were gradually putting in place the framework for a lasting solution to the debt crisis.

Lloyds Banking Group (LBG) remained the most-traded issue after investors exchanged 169 million units.

This was followed by Vodafone which saw 67.3 million units being sold.

Insurer Aviva was the top performer and saw its share price rise 21 pence -- or 7.36 percent -- to close at 306.2.

Kazakhmys was also in demand with shares up 44.50 pence -- or 6.55 percent -- to close at 723.5.

International Airlines Group (IAG) was the sessions biggest casualty as it saw its share price slide 8.30 pence -- or 5.21 percent -- to close at 151.00. IAG announced that it planned to cut jobs at its Spanish unit Iberia, whose weak performance along with soaring fuel prices sent IAG crashing into a first-half net loss.

IAG, which also owns British Airways, said it suffered a loss after tax of 251 million euros ($306 million) in the six months to June 30, compared with a net profit of 88 million euros in the first half of 2011.

The company said it was now expecting "a small operating loss in 2012" owing to Spain's weak economic backdrop, compared with a break-even result initially forecast.

Diageo was similarly under pressure, down 10 pence -- or 0.58 percent -- to end the session at 1707.5.

On the currency markets, sterling rose against the dollar and the euro.

At 17:04 BST, sterling fell to $1.5642 from $1.5515 at the same time Thursday.

The British currency rose to 1.2627 euros from 1.2737 over the same period.

Source: http://news.yahoo.com/london-shares-rise-161623452.html

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