FTSE down 1.2% as US jobs data weighs; commods hit

By Michael Taylor

LONDON, March 7 (Reuters) - Britain's leading shares ended 1.2 percent lower on Friday, led by commodities, as an unexpected drop in U.S. jobs data underlined worries over the global economy.

The FTSE 100 .FTSE fell 66.5 points to 5,699.9, to its lowest closing level in more than six weeks but recovering from a session low of 5,655.7 as U.S. stocks pared losses on short-covering towards the close of the British trading day.

The index fell sharply as data showed that U.S. employers cut payrolls for a second straight month during February, slashing 63,000 jobs for the biggest monthly job fall in nearly five years, a government report showed. See [ID:nN06253619]

"It came off the lows," said Angus Campbell, head of sales at Capital Spreads. "(But) not much really to cheer about today at all -- it's been doom and gloom."

"Jobs data was not ideal ... there were a lot of people expecting something bad anyway, so a lot of people selling into the market before the data and getting on the right side."

"Some people are coming out their short positions, taking some profit or picking up some bargains...(but) it's a pretty downbeat mood. You've got these oil prices ramping higher, inflation due to get higher -- the economy is not looking at its strongest." Fears of a global slowdown triggered by mounting credit-related losses that weighed on commodities was still in the back of traders' minds.

Miners dragged, accounting for 28 negative index points. Worries over weakening global demand and profit taking pulled the likes of BHP Billiton (BLT.L: Quote, Profile, Research), Rio Tinto (RIO.L: Quote, Profile, Research), Anglo American (AAL.L: Quote, Profile, Research), Xstrata (XTA.L: Quote, Profile, Research), Vedanta Resources (VED.L: Quote, Profile, Research), Kazakhmys (KAZ.L: Quote, Profile, Research) and Lonmin (LMI.L: Quote, Profile, Research) lower.

Oil shares also suffered as crude prices CLc1 hit $106 a barrel. BP (BP.L: Quote, Profile, Research) lost 1.1 percent and Royal Dutch Shell (RDSa.L: Quote, Profile, Research) shed 1.9 percent.