Yahoo Finance LIVE: FTSE ends higher as UK housebuilding slumps and US economy adds fewer jobs
A look at how the major markets are performing on Friday
The FTSE 100 (^FTSE) managed to close higher on Friday as UK housebuilding continued to suffer from high interest rates, and the US economy added fewer new jobs than expected last month.
London's benchmark index had a rollercoaster day, starting lower and closing 0.5% up, while the CAC (^FCHI) gained 0.8% in Paris, and the Frankfurt DAX (^GDAXI) was 0.3% higher.
According to S&P Global there was a sharp fall in house building in July as new orders were constrained by rising borrowing costs.
It meant that residential construction work declined for eight consecutive months, with construction companies noting that rising interest rates had led to fewer sales enquiries and slower decision-making among clients during the month.
The reading came in at 43.0, up from June’s 39.6, but still well below the 50-point mark showing stagnation.
The construction Purchasing Managers’ Index (PMI) recovered to 51.7, its highest level since February, and up from June’s five-month low of 48.9.
John Glen, chief economist at the Chartered Institute of Procurement & Supply (CIPS), said: "Although the sector showed a slight uplift in activity in July, there is a question mark over the sustainability of this growth and the challenges that lie beneath the floorboards.
"Decisions about buying a new home are being delayed by many consumers. Another fall in residential building levels and for the eighth month in a row, it’s obvious that UK interest rate rises and cost of living pressures have dealt a hammer blow to the housing sector. The commercial and civil engineering sectors remained the only engines of growth last month."
Meanwhile, German factory orders saw their highest jump in three years in June in a sign that the economy is stabilising. Demand climbed 7% from the previous month, thanks to major orders, beating expectations of a decline.
"European markets underwent another negative session yesterday as this week’s sell off continued to gather momentum, with the DAX falling for the 4th day in a row, while the FTSE100 finished lower for the 3rd straight session, although it was notable that we closed well off the lows of the day," Michael Hewson of CMC Markets said.
World stock markets are set for their worst week since March. According to Reuters the MSCI All-World index is headed for its biggest weekly drop in five months.
Across the pond, the US non-farm payroll rose by 187,000 in July, below forecasts of an increase of 200,000.
June’s NFP was also revised down 209,000 to 185,000, while May’s was cut from 306,000 to 281,000, meaning fewer jobs were created in the spring than initially thought.
The US Bureau of Labour Statistics has also reported that the unemployment rate fell to 3.5%, down from 3.6% in June.
Watch: How does inflation affect interest rates?
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