LONDON Britain's top share index climbed to a two-week high on Friday after data showing a greater than expected slowdown in U.S. employment growth last month lowered the chances of an interest rate hike in the United States this month.
Non-farm payrolls rose by 151,000 jobs in August after an upwardly revised 275,000 increase in July, with hiring in manufacturing and construction declining. Economists had forecast payrolls rising 180,000 last month.
The blue-chip FTSE 100 index finished 2.2 percent higher, the biggest one-day percentage gain in more than two months. It bounced after falling in the previous three session's to a four-week low on Thursday.
"Today's jobs data has raised expectations that a U.S. rate hike could be delayed," said Jawaid Afsar, senior trader at Securequity. "A weakness in the dollar following the payroll numbers has helped commodities, which have a heavy weight on the benchmark FTSE 100 index."
Commodities shares were in demand after prices of gold, oil, copper and nickel advanced following a drop in the dollar after the U.S. jobs data. A weaker U.S. currency generally makes dollar-priced commodities cheaper for other currency holders and in turn raises demand.
The UK mining index rose 2.1 percent, boosted by rallies of between 2.4 to 3.0 percent in Fresnillo, Anglo American, Randgold and Glencore.
The UK oil and gas index was up 2.8 percent as share prices of Royal Dutch Shell and BP both rose nearly 3 percent.
However, cruise operator Carnival dropped 4.1 percent, trading at the bottom of the FTSE 100, after a downgrade from Morgan Stanley to "underweight".
Carnival was joined by housebuilders Persimmon and Taylor Wimpey, which fell 0.5 percent and 0.8 percent respectively, weighed down by a sharp drop in mid-cap sector peer McCarthy & Stone.
Retirement home builder McCarthy & Stone slumped nearly 12 percent after saying it had seen fewer new house reservations and an increased level of cancellations after Britain's vote in June to leave the European Union.
"Against a sector that has been rebounding strongly on the belief that the housing sector will be fully ‘shrugging off Brexit’, this more cautious statement could have a more negative impact on this stock’s valuation," Robin Hardy, analyst at Shore Capital Markets, said in a note.
(Additional reporting by Kit Rees; Editing by Jon Boyle)