Stock prices in London were higher at midday Friday, as investor sentiment recovered from the sell-off earlier this week.
A week after the shock US nonfarm payrolls print that sent global stocks tumbling, the mood in markets was more sanguine. The NFP print had suggested that the US labour market was weakening much more rapidly than anticipated, which stoked fears of a recession. However, Thursday’s jobless claims data suggested that more people were finding and keeping work, with fewer new claims than expected.
‘The US weekly jobs claims to their lowest level in four weeks, suggesting that the slowdown in the labour market remains gradual. The sky is not falling. There is no emergency,’ commented Bannockburn Global Forex.
The FTSE 100 index was up 37.64 points, 0.5%, at 8,182.61. The FTSE 250 was up 161.52 points, 0.8%, at 20,670.10, and the AIM All-Share was up 2.61 points, 0.3%, at 767.82.
The Cboe UK 100 was up 0.5% at 817.33, the Cboe UK 250 was up 0.9% at 18,120.14, and the Cboe Small Companies was up 0.2% at 16,714.17.
Mining stocks such as Anglo American and Antofagasta were on the up, rising 2.6% and 2.5% respectively.
This comes amid positive economic data from China - a key driver of demand for commodities.
Chinese consumer inflation picked up more than expected and spiked to its hottest level in five months, providing some much-needed positive news on the world’s number-two economy.
July’s 0.5% increase on-year in the consumer price index - the main gauge of inflation – was sharply up from the 0.2% seen in June and marked the sixth straight month of rising.
Commodity prices picked up somewhat, with Brent oil quoted at $79.25 a barrel at midday in London on Friday, up from $78.92 late Thursday. Gold was quoted at $2,424.05 an ounce, up against $2,415.11.
Elsewhere in the FTSE 100, Hargreaves Lansdown rose 2.3%.
The Bristol-based wealth management platform accepted a £5.44 billion takeover offer from a consortium of private equity buyers led by CVC.
The consortium, made up of CVC Private Equity Funds, Nordic Capital XI Delta and Platinum Ivy B 2018 RSC Ltd, a wholly owned subsidiary of the Abu Dhabi Investment Authority, have agreed to pay 1,140 pence per share cash for each Hargreaves Lansdown share.
In the FTSE 250, Bellway shares were up 3.1%.
The housebuilder said it was encouraged by the new UK government’s plan to increase the supply of homes in the country, as it reported a slump in house completions.
The Newcastle-based firm said total house completions dived 30% to 7,654 in the financial year ended July 31, from 10,945 a year prior. The average selling price dipped 0.7% to £308,000 from £310,306. However, Bellway said both figures were slightly ahead of previous guidance.
Housing revenue fell 31% to £2.35 billion from £3.40 billion.
More positively, Bellway said its forward order book stood at 5,144 homes on July 31, up 17% from 4,411 a year before.
‘The profits and dividends of the glory, glory, Help-to-Buy-fuelled days of the late 2010s may not be repeated in a hurry but Bellway’s trading statement flags improved reservation rates, a higher order book and expectations that completions will start to grow in the fiscal year to June 2025,’ commented AJ Bell investment director Russ Mould.
Meanwhile, on AIM, Kazera Global jumped 38%.
The mining-focused investment company entered into a debt facility agreement with its two largest shareholders. Richard Jennings and Tracarta Ltd agree to provide unsecured term loans of £150,000 and £350,000 each.
Kazera will use the fund toward the cash part of the consideration for the Tectonic Gold deal announced on Wednesday. The deal will see Kazera acquire 10% of Tectonic Gold’s shareholdings in both Deep Blue Minerals and Whale Head Minerals. The deal also includes Tectonic’s economic interest in loans it has with WHM’s Black Economic Empowerment partners.
CEO Dennis Edmonds says the loans are expected to provide ‘sufficient cash cover to take the company into being cash generative’.
In European equities on Friday, the CAC 40 in Paris was up 0.6%, while the DAX 40 in Frankfurt was up 0.4%.
The pound was quoted at $1.2754 at midday on Friday in London, rising from $1.2720 at the equities close on Thursday. The euro stood at $1.0922, up against $1.0907. Against the yen, the dollar was trading at JP¥147.19, up slightly compared to JP¥147.17.
Stocks in New York were called slightly higher. The Dow Jones Industrial Average was called marginally higher, the S&P 500 index up 0.2%, and the Nasdaq Composite up 0.3%.
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