European equities kicked off the week in positive fashion, with housebuilders and banks supporting the FTSE 100, though the Friday feeling could be short-lived if a US jobs report comes in hotter-than-expected.
The FTSE 100 index opened up 22.72 points, 0.3%, at 7,469.25. It has risen 2.4% so far this week, which would be its best gain since a 3.1% rise in the week to September 15.
The FTSE 250 was up 112.02 points, 0.6%, at 17,879.32 and the AIM All-Share was up 2.02 points, 0.3%, at 692.36.
The Cboe UK 100 was up 0.3% at 745.28, the Cboe UK 250 was up 0.8% at 15,580.30, and the Cboe Small Companies edged up 0.1% at 12,793.43.
In European equities, the CAC 40 in Paris rose 0.2%, while the DAX 40 in Frankfurt was up 0.4%.
In New York overnight, the Dow Jones Industrial Average surged 1.7%, the S&P 500 soared 1.9% and the Nasdaq Composite jumped 1.8%.
The pound was quoted at $1.2192 early Friday, rising from $1.2176 at the London equities close on Thursday. The euro stood at $1.0623, up from $1.0613. Against the yen, the dollar was trading at JP¥150.37, down from JP¥150.48.
Equities in Asia were on the up. The Shanghai Composite climbed 0.7%, while the Hang Seng in Hong Kong jumped 2.5%. The S&P/ASX 200 in Sydney shot up 1.1%. Financial markets in Tokyo were closed Friday for Japan Culture Day.
Focus is on the latest US jobs report, due at 1230 GMT.
According to FXStreet cited consensus, US nonfarm payroll growth is expected to have eased to 180,000 in October, from 336,000 in September. That outcome would aid the notion that the Fed is done hiking. A hotter-than-expected reading may strengthen the case for the Fed to resume hiking, or at least leave rates at loftier territory for longer.
SPI Asset Management analyst Stephen Innes commented: ‘Friday’s NFP report will decide the macro week. With markets moving into the goldilocks zone, the upcoming payrolls report might be pivotal because too hot or cold could swing the pendulum to more ’watchful waiting’ to see how the Fed responds or, worse, more imminent recession fear if the print misses by a wide margin. But coming in near or on the breadth of economist’s guesses would probably hit a high note for investors.’
In London, it was a day of recovery for some of the worst-performing shares of recent weeks.
The banking sector was on the up, recovering some poise after a largely underwhelming third-quarter earnings season. NatWest rose 2.1%, Barclays added 1.5% and Lloyds climbed 1.2%. Since the end of September, NatWest has tumbled 21%, Barclays 15% and Lloyds 4.7%.
The interest rate sensitive property sector was on the up, following a Bank of England interest rate pause. Although the BoE warned of higher for longer rates, possibly in a bid to temper cut expectations, markets were largely unconvinced so far.
Housebuilder Barratt Developments rose 0.3%, peer Berkeley 0.3% and property investor Segro added 0.6%.
Currys surged 5.5%, the best mid-cap performer. The consumer electronics retailer said it has struck a deal to sell Dixons South East Europe, the holding company of its Greece and Cyprus retail business Kotsovolos.
The unit will be sold to Public Power Corp for an enterprise value of €200 million.
‘The disposal will simplify the group’s structure enabling it to focus on its larger markets of the UK & Ireland and Nordics, while simultaneously strengthening Currys’ balance sheet, increasing flexibility to invest and grow the business and improve shareholder returns,’ the company said.
Currys plans to use the proceeds to trim net debt. It will also look to enter into discussions with pension trustees for the potential to reduce the pension fund’s accounting net deficit and required future contributions.
Elsewhere in London, Corcel surged 9.5% after drilling at the Full Binga section of the Tobias-13 in Angola found ‘several potentially productive zones seen in multiple intervals’.
Executive Chair Antoine Karam said: ‘The initial results of the TO-13 well are an important moment for Corcel and highly encouraging, having successfully demonstrated hydrocarbons across multiple potentially productive zones and multiple intervals.’
Surface Transforms fell 33%. The carbon-ceramic automotive brake disc manufacturer said that while some technical problems have been overcome, it is still seeing challenges in its production line.
‘These challenges, which are being resolved, are hindering us from creating sufficient capacity resilience and are constraining our production ramp up,’ it said. ‘In the light of these challenges, the company is now planning its cash needs and customer commitments based on a shallower ramp and now expects to reach the required rate of production in Q1 2024, later than previously forecast.’
Surface Transforms is now cutting sales guidance for 2023 to £8.6 million.
It added: ‘Overall, the outlook for 2024 to 2027 continues to remain very positive reflecting contracts in series production and recent new business announcements, with capacity being installed to fulfil these awards.’
Over in Paris, Societe Generale added 0.8%, despite its third-quarter underwhelming.
It said operating income for the third quarter of 2023 fell 27% to €1.51 billion from €2.06 billion the previous year. For the first nine months of the year, it decreased 20% to €4.63 billion from €5.77 billion.
Quarterly revenue dipped by 6.2% to €6.19 billion from €6.60 billion, with Chief Executive Officer Slawomir Krupa saying its income was ‘penalised by the negative effect of short-term hedges on net interest income in French retail,’ which peaked in the third quarter. Nine-month revenue decreased 6.8% to €19.15 billion from €20.54 billion.
Reported group net income dropped to €295 million from €1.45 billion in the third quarter, but rose to €2.06 billion from €755 million in the first nine months.
Over in Frankfurt, Siemens Healthineers added 2.4%. It is mulling options for its diagnostics arm in a bid to streamline, Bloomberg reported Thursday, citing people familiar with the matter.
The unit could be worth as much as $8 billion and may attract interest from private equity, the sources said.
Brent oil was quoted at $87.21 a barrel early Friday London time, up from $86.38 at the European equities close on Thursday. Gold was quoted at $1,986.99 an ounce, up from $1,981.27.
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