Investors in London showed some confidence at the open on Friday, looking ahead to US jobs data later in the day.
The FTSE 100 index opened up 18.77 points, 0.3%, at 7,532.49. The FTSE 250 was up 57.82 points, 0.3%, at 18,676.56, and the AIM All-Share was up 1.82 points, 0.3%, at 722.68.
The Cboe UK 100 was up 0.2% at 752.22, the Cboe UK 250 was up 0.3% at 16,205.44, and the Cboe Small Companies was up 0.3% at 13,958.40.
In European equities on Friday, the CAC 40 in Paris was up 0.5%, while the DAX 40 in Frankfurt was up 0.2%.
Investors are looking ahead to the US non-farm payroll report, which could help set the direction for the Federal Reserve interest rate outlook. Friday’s data is expected to show that nonfarm payrolls rose to 180,000 last month, from 150,000 in October.
The data will be an indicator of the health of the US labour market, ahead of the Fed’s interest rate decision on Wednesday next week.
‘Despite the significance of the government’s jobs report, the continuous strength in risk assets indicates that the bar for the report to deliver an unequivocally strong or hawkish message is set relatively high. Even in the face of a robust jobs print, the current Fed policy stance is less urgent, given that core inflation is near target sequentially, and commodity price pressures remain subdued,’ commented SPI Asset Management’s Stephen Innes.
Sterling was quoted at $1.2563 early Friday, pulling back from $1.2580 at the London equities close on Thursday. The euro traded at $1.0779, lower than $1.0791.
Meanwhile, in the FTSE 100, Anglo American dropped 6.4%.
The miner said production in 2023 is likely to have increased by around 3%, as its CEO Duncan Wanblad said ‘the prospects for mined products have rarely looked better’.
However, it expects production to fall by around 4% next year and a further 3% or so in 2025, as it reschedules to enhance value and reduce unit costs, before production rises around 4% in 2026. ‘Operationally, we are improving cost performance and cash generation by reconfiguring a number of our assets to adjust the production profile to near term constraints and market conditions, and thereby also protect longer term value,’ explained CEO Wanblad.
Sainsbury’s rose 3.3%, as Goldman Sachs raised the stock to ’buy’ from ’neutral’.
In the FTSE 250, IG Group rose 1.5%.
The online training provider said Breon Corcoran will join as its new CEO from January 29 next year, subject to regulatory approval. He was previously CEO of WorldRemits until 2022, and led Paddy Power Betfair until 2018, and is currently non-executive chair of Auction Technology Group.
On AIM, Landore Resources plunged 36%.
The exploration and development company said ‘turbulent market conditions’ worldwide have led to ‘significant’ fundraising challenges, and it has therefore decided to terminate its C$5 million private placement which was set to fund its dual listing on the TSX Venture Exchange. It has postponed the proposed dual listing until further notice, and has begun a cost-cutting plan to preserve its existing cash.
‘The company will revisit financing opportunities during Q1 2024 and is also exploring alternative funding options to enable it to, inter alia, proceed with a drilling campaign on its flagship BAM Gold Project at the Junior Lake property in Northwestern Ontario at the earliest opportunity,’ Landore said.
Elsewhere on the economic front, focus was on the Japanese yen.
Against the yen, the dollar was quoted at JP¥144.21, slightly higher versus JP¥144.07. The Japanese currency mostly held on to recent gains after Bank of Japan Governor Kazuo Ueda said handling monetary policy ‘will become even more challenging from the year-end and heading into next year’, Bloomberg News reported. The dollar had fetched over JP¥147 earlier this week.
Traders had interpreted Ueda’s remarks to mean that the bank was on the brink of shifting away from its long-running ultra-loose monetary policy, which had been put in place to kickstart growth.
‘The BoJ’s negative rate is the last souvenir of the zero/negative rate era and any small hint that things will get moving over there could move oceans. And this is what happened yesterday. The speculation that the BoJ will hike rates as soon as this month spiked to 45% soon after Mr Kuroda’s words reached investors’ ears,’ said Swissquote Bank senior analyst Ipek Ozkardeskaya.
The strong yen held back stocks in Japan on Friday, as the Nikkei 225 index in Tokyo closed down 1.7%.
Further, government data showed Japan’s economy contracted by 0.7% in the third quarter, revising a preliminary estimate that it shrank 0.5%. The drop, which followed two straight quarters of growth, came on the back of low consumer spending and lacklustre exports.
Trading elsewhere in the region was more tepid. In China, the Shanghai Composite closed up 0.1%, while the Hang Seng index in Hong Kong fell 0.1%. The S&P/ASX 200 in Sydney closed up 0.3%.
In the US on Thursday, Wall Street ended higher, with the Dow Jones Industrial Average up 0.2%, the S&P 500 up 0.8%, while artificial intelligence optimism sent the tech-heavy Nasdaq Composite up 1.4%.
In particular, Advanced Micro Devices jumped 9.9%, as the chipmaker launched new AI chips to compete with Nvidia. However, Nvidia shares also closed up 2.4%, despite the threat of more competition. ‘The AI demand is big enough for everyone to benefit amply from it,’ Swissquote’s Ozkardeskaya considered.
Google parent Alphabet also added 5.3% following the launch of its latest AI model, Gemini.
Gold was quoted at $2,029.24 an ounce early Friday, edging higher than $2,028.77 on Thursday.
Brent oil was trading at $75.56 a barrel, higher than $74.52.
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