London share prices moved tentatively higher at the open, as a partial rebound in crude prices lifted oil producers, but bigger bets were on hold ahead of the key data point that comes on the first Friday of every month, the US nonfarm payroll report.
The FTSE 100 index was up 32.60 points, or 0.5%, at 7,181.10 early Friday. The mid-cap FTSE 250 index was up 93.25 points, or 0.5%, at 18,586.99. The AIM All-Share index was up 1.41 points, or 0.2%, at 863.43.
The Cboe UK 100 index was up 0.6% at 717.72. The Cboe 250 was up 0.5% at 15,924.45, and the Cboe Small Companies up 0.1% at 13,760.60.
In mainland Europe, the CAC 40 in Paris was up 0.5% while the DAX 40 in Frankfurt was up 0.9% early Friday.
Focus was on the week's key risk event, the US jobs report for August, due at 1330 BST
‘All eyes today will be on the US labour market report for August, which is likely to suggest that conditions remain too tight for the Fed's comfort,’ said Daiwa Capital Markets.
Consensus, according to FXStreet, expects the US economy to have added 300,000 net jobs in August, slowing from the 528,000 added in July.
A surprise to the upside could fuel interest rate tightening fears. A dramatic undershoot could add to recession worries, however.
‘Labour market data tends to lag the rest of the economy, and it is only a matter of time before hiring activity begins to slow significantly,’ warned RMB Markets Research.
According to the CME's FedWatch tool, markets have the chance of a 75 basis point rate hike from the US Federal Reserve 72% priced in for this month, up from 41% a month ago.
The dollar was mixed heading into the data. Sterling was quoted at $1.1565 early Friday, higher than $1.1534 at the London equities close on Thursday.
But the euro traded at $0.9999 early Friday, dipping from $1.0044 late Thursday. Against the yen, the dollar was quoted at JP¥140.23, up versus JP¥139.94.
Gold was quoted at $1,702.75 an ounce early Friday, up from $1,694.00 on Thursday.
Ahead of the US jobs data, stocks in Europe were rebounding after a difficult week. The FTSE 100 edged up despite a drag from housebuilders.
Housebuilder Berkeley Group was the worst performer in the FTSE 100 in early trade, down 4.3%, while peer Barratt Developments was down 3.0% and Persimmon down 1.9%.
An estate and letting agent has predicted UK house prices are likely to stall next year as inflation continues to bite and mortgage rates rise, but rental prices will continue to increase despite affordability pressures on tenants.
Given the pressure on household incomes, Hamptons said it forecasts prices to be unchanged in the fourth quarter of 2023 compared with the same period in 2022, with 0% change across Britain. Sales are expected to be hit next year, with a drop stemming from mortgaged buyers, particularly first-time buyers, according to the forecast.
The estate agent said 2024 could be a ‘year of recovery’ helped by some pent-up demand from 2023.
Meanwhile, shares in Shell rose 1.4% after agreeing to sell its stake in joint venture Aera Energy to Ikav, a Germany-based energy asset manager.
Shell is selling its 52% stake for $2 billion in cash, with additional contingent payments based on future oil prices. Financial details of the sale to Ikav of the 48% held by Exxon, the other owner in the venture, were undisclosed.
Separately, Reuters reported that Ben van Beurden is set to leave as chief executive next year after almost 10 years leading the oil major.
Citing two company sources, the news agency said plans for Beurden's replacement are underway, with a succession committee, led by Chair Andrew Mackenzie, having met ‘several times in recent months’.
Among the potential candidates are Wael Sawan, Shell's head of integrated gas & renewables, and Huibert Vigeveno, the head of its downstream refining operations.
Shell shares also were helped by a recovery in oil prices. Brent oil was trading at $94.10 a barrel, higher than $92.53 late Thursday but still more than $10 off the week's peak of $105 a barrel.
Shares in fellow oil major BP were up 1.9%.
In Asia on Friday, the Japanese Nikkei 225 index closed slightly lower. In China, the Shanghai Composite ended slightly higher, while the Hang Seng index in Hong Kong was down 0.7%. The S&P/ASX 200 finished down 0.3%.
In the international economic calendar on Friday, there are eurozone producer prices at 1000 BST and the monthly US jobs report at 1330 BST.
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