Share prices in London and elsewhere in Europe started the new week slightly higher, as investors continued to digest a blowout US jobs report on Friday that should the world's largest economy to be in surprisingly ruddy health.
Adding to the positive sentiment, a large US spending package came closer to passage over the weekend, and China reported continued strong export growth.
The FTSE 100 was up 45.67 points, or 0.6%, at 7,493.73 early Monday. The FTSE 250 index was up 70.62 points, or 0.4%, at 20,122.10. The AIM All-Share index was up 2.45 points, or 0.3%, at 923.30.
The Cboe UK 100 index was up 0.6% at 746.77. The Cboe 250 was up 0.3% at 17,431.65. The Cboe Small Companies was flat at 13,952.20.
In Paris, the CAC 40 stock index was up 0.7%, while in Frankfurt, the DAX 40 was 0.8% higher.
In the FTSE 100, Hargreaves Lansdown was the best performer, up 5.1%, as the fund supermarket extended Friday's gains. HL shares had closed up 4.9% on Friday after reporting annual underlying pretax profit ahead of market forecasts.
Legal & General was up 1.5% after JPMorgan upgraded the insurer to 'overweight' from 'neutral'. The 186-year old company will report interim results on Tuesday.
At the other end of the large-caps, M&G was the worst performer, down 1.1%, after JPMorgan downgraded the asset manager to 'underweight' from 'neutral'.
In the FTSE 250, PageGroup was down 7.4% despite reporting strong interim results and declaring a special dividend, as the recruiter issued a slightly cautious outlook.
PageGroup said it achieved a strong first-half performance across of its geographies, disciplines and brands, prompting the recruiter to raise its dividend.
For the six months to June 30, pretax profit rose 80% to £114.5 million from £63.7 million last year on revenue of £977.3 million, up 28% from £766.4 million.
PageGroup declared an interim dividend of 4.91p, up 4.5% from 4.70p paid last year. In addition, the headhunter announced a special dividend of 26.71p, unchanged from last year.
‘Looking forward, we recognise the heightened degree of global macro-economic and geo-political uncertainty, particularly with regards to increasing inflation around the world. In July, we noted a slight slowing in time to hire in some of our markets, and we continue to closely monitor our forward-looking key performance indicators. However, at this point, our expectations for 2022 full year operating profit remain in line with the company compiled consensus of £206 million,’ said Chief Executive Officer Steve Ingram.
PageGroup's operating profit in 2021 was £168.5 million, so consensus implies a 22% improvement.
Jefferies analyst Kean Marden commented: ‘We acknowledge the second half appears undemanding, but expect consensus EPS estimates to remain largely unchanged given the cautious tone.’
Elsewhere in London, BHP said that it offered to buy Oz Minerals late last week but that the Oz board rejected its approach.
BHP said it offered A$25.00 per share for Sydney-listed Oz, 32% above its close on Friday of A$18.92. On Monday, the stock ended up 35% at A$25.59, giving Oz Minerals a market capitalisation of A$8.57 billion, about £4.93 billion.
The offer requires unanimous recommendation by the Oz board, but BHP said the board has refused to engage.
‘Our proposal represents compelling value and certainty for Oz Minerals shareholders in the face of a deteriorating external environment and increased OZL operational and growth-related funding challenges,’ said BHP Chief Executive Officer Mike Henry.
‘We are disappointed that the board of OZL has indicated that it is not willing to entertain our compelling offer or provide us with access to due diligence in relation to our proposal.’
Oz Minerals said the BHP offer ‘significantly undervalues’ the company.
BHP shares closed up 0.8% in Sydney on Monday and were down 0.2% early in London.
On AIM, Joules was up 31% after the British lifestyle retailer confirmed a weekend press report that it was in discussions to sell a stake to FTSE 100-listed retailer Next, in a move that could raise around £15 million.
Next shares were up 0.4%.
Joules did not confirm the size of the stake but said Next would become a ‘strategic minority shareholder’.
In addition, Joules said it was also in discussions over joining Next's burgeoning online platform to support its ‘long-term growth plans’.
Last month, Joules confirmed it was in talks with KPMG to shore up its balance sheet, as the retailer grapples with a cost of living crisis and inflationary pressures. Iin May, Joules had warned that challenging market conditions caused profit to fall below management expectations in some areas of its business.
Wall Street ended mostly lower on Friday following a strong US jobs report. The Dow Jones Industrial Average closed up 0.2%, but the S&P 500 slipped 0.2% and the Nasdaq Composite by 0.5%.
Official data published Friday showed the US economy added 528,000 positions, defying all expectations of a slowdown.
On Sunday, after 18 months of arduous negotiations and a marathon night of debate, the US Senate passed Joe Biden's ambitious climate, tax and health care plan - a significant victory for the president ahead of crucial midterm elections.
Voting as a unified bloc and with the tie-breaking vote cast by Vice President Kamala Harris, Democrats approved the $430-billion spending plan, which will go to the House of Representatives next week, where it is expected to pass before being signed into law by Biden.
In Asia on Monday, the Nikkei 225 index in Tokyo closed down 0.3%. In China, the Shanghai Composite closed up 0.3%, while the Hang Seng index in Hong Kong was down 0.7%. The S&P/ASX 200 in Sydney ended up 0.1%.
China's foreign trade continued to grow unexpectedly strongly in July, with an 18.0% rise in exports compared to the same period last year, the Chinese customs authority said. Analysts had actually predicted a slowdown in Chinese export growth after a similarly large increase of 17.9% was recorded last month.
By contrast, imports into China increased by just 2.3%.
China's trade with Russia in particular saw a huge rise, increasing by 37% overall. China's imports from its neighbour - which is under international economic sanctions for its invasion of Ukraine - rose by 49%, while Chinese exports to Russia grew by 22%.
The dollar was lower across the board. The pound was quoted at $1.2112 early Monday, up from $1.2060 at the London equities close Friday.
The euro was priced at $1.0205, up from $1.0165. Against the yen, the dollar was trading at JP¥135.03 in London, lower against JP¥135.20.
Brent oil was quoted at $95.74 a barrel Monday morning, down from $96.23 late Friday. Gold stood at $1,775.12 an ounce, slightly lower against $1,776.71.
Earnings season continues in earnest this week. Interim results are due from InterContinental Hotels Group and fund manager abrdn on Tuesday, insurer Prudential on Wednesday, miner Antofagasta on Thursday and gambling company Flutter Entertainment on Friday.
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