Shares in London fall

Wall Street responded to some of the worst US employment figures for years causing shares in London to fall. Analysts had expected an increase of 112,000, so were shocked by news of a 4,000 drop, the first non-farm jobs drop for 4 years.

The FTSE 100 also slumped in expectation of a big drop in New York. As the London market closed last Friday, 122.1 lower at 6191.2, the Dow Jones was off 213 points.

BAE Systems, the UK defence contractor, leapt 6p to 454p after rumours that it is set to close a deal to supply 72 Eurofighter Typhoon jets worth £20 billion to Saudi Arabia. BAE was one of just a few of blue-chip stocks to stay positive.

The major High Street banks are battling to make headway in a sea of bad news and rumours. Barclays was down 19p to 589p. The news is that that Barclays’ $2 billion sale of 5-year treasury notes had fallen far short of expectations. This, along with management’s refusal to confess to its exposure to the subprime mortgage debt and the situation with ABN Amro situation, meant Barclays suffered heavy selling.

Sage, the software firm, was up 4¼p to 243p, following UBS upgrading its call from neutral to buy and lifted its target by 20p to 285p ahead of October’s trading update.

The supermarket giant, J Sainsbury, was secure, 5p higher at 547p. Investors were encouraged by a report from SocGen, the French bank, gave Delta Two’s £10.6 billion bid approach a 90% chance of succeeding. The report states that neither party can abandon the deal and notes that the supermarket has granted the Qatari-backed bid 7 weeks to get its act together compared with the 4 weeks it granted former bidder KKR.

Outside the FTSE 100, Arena Leisure was boosted by news that it plans to build a casino at Wolverhampton racecourse. Arena is planning a £23 million development including a hotel and swimming pool as part of its target to transform its racecourses into year round leisure destinations.

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