European shares recovered after a shaky start to Friday’s session, but the FTSE 100 remained uneasy heading into the latest US jobs report.
The UK flagship index was held back by weakness in banking and mining names.
Outside of Europe, stocks in Tokyo sharply pared gains overnight following news that former Japanese prime minister Shinzo Abe had been shot while campaigning in Nara region ahead of Sunday’s upper house election. He later succumbed to his injuries.
The blue-chip FTSE 100 index was down 8.14 points, or 0.1%, at 7,180.94. London’s flagship index is up 0.2% so far this week.
The mid-cap FTSE 250 index was down just 3.35 points at 18,872.18. The AIM All-Share index was up 3.57 points, 0.4%, at 884.04.
The Cboe UK 100 index was down 0.2% to 716.54. The Cboe 250 was up 0.3% at 16,444.92, while the Cboe Small Companies was 0.3% higher at 13,245.83.
In mainland Europe, the CAC 40 stock index in Paris recovered from early weakness to sit 0.6% higher, while the DAX 40 in Frankfurt was 1.4% higher, despite also spending much of the morning in the red.
‘It’s been a chaotic week for politics and a rollercoaster ride for investors as markets experienced yet more wild swings. The FTSE 100 is trying its very best to hold on to this week’s winning streak, but it looks touch and go as to whether the index will have the stamina to stay higher for the whole of Friday,’ AJ Bell investment director Russ Mould commented.
The FTSE 100, which has faced global recession fears and UK political turmoil this week, started Friday on the back foot. It gathered some momentum and edged higher later in the morning, but fell once again as unease set in ahead of the latest US jobs report.
In addition, share price falls for banking stocks and miners held back UK flagship index. Anglo American, down 3.0%, and Standard Chartered, 3.5% lower, were the worst performers.
Due at 1330 BST, US nonfarm payrolls are expected to come in at 268,000 in June, down from the 390,000 jobs added in May, according to consensus cited by FXStreet.
The upcoming US banking earnings season was also to blame for some of Friday’s nervy trading.
Mould added: ‘US banking season kicks off next week and investors will be looking at deal flows for corporate banks and evidence of bad debts among consumer customers. While banks normally benefit from a rising interest rate environment, as that provides an opportunity to increase earnings by charging more for lending, the market typically worries about the sector if recession strikes.’
Next week, JPMorgan Chase and Morgan Stanley report on Thursday, before Wells Fargo and Citigroup follow the day after.
US equities were pointed to a mixed start on Friday. The Dow Jones Industrial Average was called up 0.1%, but the S&P 500 and Nasdaq Composite were called down 0.1% and 0.2%.
In Tokyo, the Nikkei 225 closed 0.1% higher, well off session highs.
Japan’s former prime minister Shinzo Abe was pronounced dead on Friday afternoon, the hospital treating him confirmed, after he was shot at a campaign event.
The assassination of the country’s best-known politician comes despite Japan’s strict gun laws and with campaigning under way ahead of upper house elections on Sunday.
Earlier, Prime Minister Fumio Kishida abandoned the campaign trail and flew to Tokyo by helicopter where he addressed reporters in a voice that wavered with emotion.
Against the yen, the dollar was trading at JP¥135.90 midday Friday UK time, flat from JP¥135.91 late Thursday, but up from an overnight low of JP¥135.36.
The pound was quoted at $1.1982 midday Friday in London, down from $1.2002 late Thursday. The euro stood at $1.0139, down from $1.0172.
The euro recovered from an intraday low of $1.0075, the closest it has been to falling to dollar parity since 2002.
‘The market’s bias remains to sell EURUSD expecting a test towards parity, and the risk of a correction only increases if US payrolls flop,’ SPI Asset Management analyst Stephen Innes commented.
In London, AIM-listed Tekmar was among the standout performers, soaring 90%.
The firm has won a ‘significant’ new pact to provide an integrated engineering solution for an offshore wind farm project in Japan. The contract is to be delivered in 2023.
The Darlington, County Durham-based offshore energy services firm, which recently launched a formal sales process, hailed the award an ‘important strategic milestone’.
Fellow AIM listing Science in Sport dropped 21%.
The sports nutrition firm said revenue growth in the first half of 2022 was slower than expected. Revenue for the half-year period climbed 12% year-on-year.
It expects growth to improve in the second half, due to ‘improved pricing’ and as investments in its brands and digital channels start to pay off.
It also added that it expects to be hit by £3.2 million of costs or margin loss, based on its current assessment of external factors.
‘This includes raw material price increases, fuel and logistics costs, people retention costs, and closure of our Russian business,’ the company explained.
JD Sports rose 2.7%, among the best large cap performers, after the athleisure retailer said it has named Andy Higginson as chair following an ‘extensive search process’.
Higginson was formerly chair of supermarket chain Wm Morrison, from 2015 until its private equity takeover in November. He is also currently a senior independent director at Flutter.
In June, the firm shared that the process to recruit a new non-executive chair was ‘progressing at pace’, and ‘a number of high calibre candidates’ for chief executive were under consideration.
In May, Peter Cowgill left as executive chair with immediate effect. JD Sports in July 2021 had bowed to shareholder pressure over its corporate governance, agreeing to split its chair and CEO roles.
Shares in pub operators faced selling pressure. Mitchells & Butlers fell 3.1%, while Marston’s lost 4.7%.
HSBC cut Marston’s to ‘reduce’ from ‘hold’ and lowered All Bar One owner M&B to ‘hold’ from ‘buy’.
Brent oil was quoted at $104.49 a barrel, down from $105.66. Gold stood at $1,742.25 an ounce, largely flat against $1,742.44.
In New York, Twitter shares will be in focus after a Washington Post report that Elon Musk’s $44 billion deal to buy the social media giant is in danger.
The world’s richest man has previously expressed misgivings and even implied he could walk away from the deal over concerns about what he believes are an abundance of fake accounts.
According to the Post, however, Musk has been unable to pin down the percentage of Twitter accounts that are not genuine, despite being given access to internal data.
Twitter shares were 4.1% lower in pre-market trade, having closed up 1.1% at $38.79 on Friday.
Twitter shares have yet to close at Musk’s $54.20 offer price since the deal was announced, suggesting the market already was sceptical about whether it would go ahead.
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