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CITY MARKET REPORT.

FIGURES showing a disappointing month for job creation in the American economy failed to derail the London market yesterday, as the FTSE 100 Index finished the week near to the 6000 barrier.

The top flight closed up 14 points at 5997.4, helped by a strong performance from water companies after signs that the UK's inflationary bubble will boost results.

Earlier in the day it had pushed above the 6000 mark but slipped back again after the US government revealed that 36,000 new non-farm jobs were created last month, which was far below analysts' expectations of 140,000.

The pound was down against the dollar, at 1.60, despite the disappointing jobs figures, while sterling rose against the euro, at 1.19, after a Halifax survey showed a 0.7% rise in house prices in January, offsetting a sharp fall in December.

Severn Trent and United Utilities showed strong growth in the UK's top tier, both rising 4%, after Bank of America Merrill Lynch introduced buy ratings on the pair to reflect higher inflation. Severn was up 50p to 1440p and United lifted 24p to 579p.

Second-tier stocks Pennon and Northumbrian Water were raised to neutral from underperform, helping them rise 4.5p to 621.5p and 5.6p to 314.1p.

Oil giant Royal Dutch Shell extended the 3% loss seen in the previous session with a 1% fall, down 32.5p to 2145p, after its fourthquarter profits and production performance left investors cold on Thursday.

Other energy stocks remained in the red, with BG Group off 5.5p to 1429p.

Cairn Energy was the biggest Footsie faller, down 11.7p to 426.3p, after reports that Vedanta Resources was considering pulling out of a deal to buy a majority stake in Cairn India.

Thomson owner Tui Travel remained under pressure due to Egypt's civil unrest. Shares dropped another 2p to 241p.

Outside the top flight, ITV surged 4.7p to 84.1p, as Tuesday's bullish statement on advertising revenues from RTL continued to have a positive impact.

Retailer HMV rose 9% or 2p to 24.8p, boosted by takeover speculation.

The top Footsie risers were Old Mutual up 6.3p at 133p, United Utilities 24p at 579p, Severn Trent 50p to 1440p and International Power up 13.9p at 427p.

The top fallers were Cairn Energy down 11.7p to 426.3p, Antofagasta off 33p to 1491p, Royal Dutch Shell off 32.5p at 2145p and Essar Energy down 7.5p at 520.5p.
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Title Annotation:Business
Publication:Western Mail (Cardiff, Wales)
Date:Feb 5, 2011
Words:417
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