FTSE 100 index dips ahead of Eurozone GDP, US employment data

Britains headline equity index slid after hitting a multi-year high on Thursday ahead of data by Eurostat which may show the Eurozones economy saw no growth in the second quarter from the first. Investors eagerly awaited the US Labor Departments monthly jobs report, poised to show a job creation pace of over 200 000 for the sixth consecutive month.

FTSE 100 was down 0.18%, or 12.67 points, to 6 865.30 points at 8:10 GMT, having shifted in a daily range between 6 882.00 and 6 864.80. The blue-chip index added 0.06% on Thursday to settle at 6 877.97 points, its highest level since May, having soared to a daily high of 6904.50, its highest since December 1999.

The ECB cut its benchmark interest rate to 0.05%, the lowest on record, and Mario Draghi committed to buying so-called asset-backed securities and covered bonds to inject cash in the Eurozone’s stalling economy. Mr. Draghi signaled at least €700 billion of fresh aid for the single currency blocs economy.

Separately, Bank of England introduced no changes to its monetary stance. According to analysts, BoEs next step looks to be an interest-rate hike in the first half of next year, provided the UK economy continues to improve. Yesterdays FTSE 100 multi-year high was seen as investor confidence about the future.

Data by Eurostat is expected to show today that the Eurozones Gross Domestic Product was flat on a quarterly basis in the three months through June, compared to a2 0.2% growth in the first quarter. Year-on-year, economic expansion is projected at 0.7%, compared to the preceding periods 0.9%.

Investors also eagerly awaited today’s jobs report by the US Labor Department to assess how well the worlds biggest economy fared and see whether the greenback is poised for more upside. The government agency is expected to report that US employers added 225 000 people to payrolls in August, which would be the sixth straight month of job creation above 200 000, while the unemployment rate likely slid to 6.1% from 6.2% in July, further supporting the possibility of an interest rate hike.

On the geopolitical scene, events in Ukraine are as close to unfolding as ever today, as a number of events could shape the conflict and the long-term geopolitical outlook in Europe.

Foremost, peace talks between rebels and Kiev are set to begin today, after Ukrainian President Petro Poroshenko and his Russian counterpart Vladimir Putin agreed to have the peace process initiated.

The talks come after rebels directly assisted by Russian military, according to NATO, made significant advances against government troops recently. The EU could also announce further sanctions against Russia today.

Meanwhile, NATO holds its summit in Wales, with security in Eastern Europe and response to Russian aggression high on the agenda. Ukraine lawmakers yesterday approved of the countrys decision to bid for NATO membership, souring relations with the Kremlin just ahead of the scheduled peace talks with the rebels.

Top movers

The FTSE 100 top three gainers for the day were Burberry Group Plc, GKN Plc and Pearson Plc.

Burberry added 1.18% to trade at 1 498.50 pence per share at 7:57 GMT, while GKN was up 1.14% at 360.25 pence. Pearson gained 1.13% to trade at 1 121.50 pence.

Miners led the days losers, with Randgold Resources Ltd sliding 3.06% to 4 789.00 pence by 7:59 GMT, while Fresnillo Plc shed 1.98% to trade at 891.50 pence.

London Stock Exchange Group Plc dropped by 2.66%, or 55.50 pence, to 2 029.50 pence following news that Borse Dubai is selling a 3.1 percent stake, or about 8.5 million shares, in the exchange.

Shares of BP Plc rebounded after dropping almost 6% on Thursday. BP traded 457.00 pence at 8:06 GMT, up 0.44% on the day. The oil and gas companys fines for the oil spill in the Gulf of Mexico four years ago may grow by an additional $18 billion to more than $42 billion after a US judge decided that the incident was a result of BPs “gross negligence and willful misconduct”.