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FTSE sheds 2.16% after week of two halves

Stockmarket FTSE 450

The FTSE 100 has dropped 1.49 per cent today, leaving the blue-chip index down 2.16 per cent over the week after a batch of disappointing economic data.

Friday’s session ended with the FTSE 100 shedding 94.34 points to end the week at 6,249.78. The index joined other global markets in falling after official data showed the US created fewer jobs than expected in March.

According to the US Labor Department’s Employment Situation report, the world’s largest economy created just 88,000 jobs last month – significantly undershooting the 190,000 expected by the market.

Capital Economics chief US economist Paul Ashworth says: “After a very rapid start to the year, economic growth and employment gains have slowed quite sharply in March, repeating what we’ve seen in the past couple of years.

“We don’t anticipate the slowdown becoming too severe, not when the housing recovery is firing on all cylinders, but it is a reminder that the US is still unable to sustain what used to be just average rates of growth.”

Earlier in the week, moves by the Bank of Japan to dramatically expand the country’s money supply helped the world’s stockmarkets to edge higher.

The BoJ increased its asset purchase programme by ¥50trn (£350bn) a year – almost 10 per cent of Japan’s annual GDP – in a bid to meet the 2 per cent inflation target.

However, disappointing service sector data from the eurozone and a rise in US initial unemployment claims combined with the weak Employment Situation report to drag the FTSE and other markets down.

Rathbones chief investment officer Julian Chillingworth says: “Having seen a week where the data has been a lot softer there will be concerns that the whole quarter will be softer. But we’re hardly into this quarter so it’s too early to draw that conclusion.

“It’s been a game of two halves this week. We had good news out of Japan, with a much bigger stimulus package than even the bulls had expected. But then you see some soft data out of the US and people worry about a slight slowdown in economic growth there.”

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