Stocks in London opened in the green on Friday as the focus shifts towards US nonfarm payrolls data.
The FTSE 100 index opened up 24.51 points, 0.3%, at 7,476.05. The FTSE 250 was up 105.92 points, 0.6%, at 17,705.90, and the AIM All-Share was up 1.68 points, 0.2%, at 696.42.
The Cboe UK 100 was up 0.3% at 745.91, the Cboe UK 250 was up 0.5% at 15,395.86, and the Cboe Small Companies was down 0.3% at 13,204.13.
Focus now turns to Friday’s nonfarm payrolls data, the official employment report. The reading is expected to show jobs growth of 170,000 in September, easing from 187,000 in August.
The data is released at 1330 BST.
‘Today’s data could be one of the most important jobs data of the year,’ said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
UK house prices fell again in September, but the pace of the month-on-month decline slowed, according to the Halifax house price index released on Friday.
Halifax said average house prices in the UK fell by 0.4% in September from August, slowing from a 1.8% decline in August from July. Market consensus cited by FXStreet had expected house prices to have declined by 0.8% on a monthly basis.
Annually, prices fell by 4.7% in September, accelerating from a 4.5% decline in August.
Kim Kinnaird, director of Halifax Mortgages, commented: ‘Activity levels continue to look subdued compared to recent years, with industry data showing lower levels of new instructions to sell homes and agreed sales. Borrowing costs are the primary factor, given the impact of higher interest rates on mortgage affordability. Against this backdrop, homeowners inevitably become more realistic about their target selling price, reflecting what has increasingly become a buyer’s market.’
On the back of the data, housebuilders were on the up Persimmon jumped 1.3%, Barratt Developments rose 0.8%, and Taylor Wimpey up 0.7%.
Elsewhere in the FTSE 100, insurance company Aviva climbed 8.2%.
On Wednesday, Jefferies upgraded the stock to ’buy’ from ’hold’.
The broker forecasts £5.3 billion of capital returns between 2023-26, equivalent to 51% of Aviva’s current market cap, underpinned by a strong solvency II ratio, with a 2023 forecast of 205%, and the best free cash flow yield versus UK life insurance peers.
Aviva could be facing a takeover according to the Times who reported possible interest from Allianz, Intact Financial and Tryg. One is reported to mull a £6 a share proposal compared to the current share price of £4.20. Further, an American insurer is rumoured to be interested in Aviva.
Rio Tinto was up 1.3%. UBS raised the company to ’neutral from ’sell.’
In the FTSE 250 index, Wetherspoon lost 4.7%.
The Watford, Hertfordshire-based pub and hotel chain swung to a pretax profit before separately disclosed items of £42.6 million in the financial year that ended July 31 from a loss of £30.4 million the year before. Revenue increased 11% to £1.93 billion from £1.74 billion the year prior.
Looking ahead, the company said it continues to perform ‘well.’ In the first nine weeks of the current financial year, sales are up 9.9% annually.
‘As we said last year, perhaps the biggest threat to the hospitality industry is the possibility of further lockdowns and restrictions,’ Chair Tim Martin said.
Amongst London’s small-caps, Metro Bank rose 6.6%.
Metro Bank has begun a process to sell a £3 billion chunk of its mortgage book to shore up its finances, Sky News reported on Thursday.
The under pressure lender as sized up high street banking neighbours as possible buyers, including Lloyds Banking and NatWest, Sky News reported, citing City sources.
The measures would form part of a wider capital raising plan, which Sky News reported would include a £100 million equity raise and a refinancing of £350 million worth of debt which is due roughly this time next year. The Financial Times had that Metro Bank’s possible balance sheet boosting efforts would be worth £600 million, £250 million in equity funding and £350 million in debt.
On Thursday, Metro Bank said it ‘continues to consider how best to enhance its capital resources.’ In particular, it noted its £350 million senior non-preferred notes due in October 2025.
In European equities on Friday, the CAC 40 in Paris was up 0.4%, while the DAX 40 in Frankfurt was up 0.5%.
The pound was quoted at $1.2191 early on Friday in London, lower compared to $1.2164 at the equities close on Thursday. The euro stood at $1.0548, lower against $1.0526. Against the yen, the dollar was trading at JP¥148.89, up compared to JP¥148.83.
In Asia on Friday, the Nikkei 225 index in Tokyo was closed down 0.3%. In China, the Shanghai Composite closed up 0.1%, while the Hang Seng index in Hong Kong was up 1.6% in late trade. The S&P/ASX 200 in Sydney closed up 0.4%
In the US on Thursday, Wall Street ended lower. The Dow Jones Industrial Average closed down marginally. Both the S&P 500 and the Nasdaq Composite were down 0.1%.
Brent oil was quoted at $84.18 a barrel early in London on Friday, down from $84.56 late Thursday. Gold was quoted at $1,819.87 an ounce, higher against $1,815.53.
Before the US jobs report in the afternoon, Friday’s economic calendar has Irish gross domestic product data at 1100 BST.
Copyright 2023 Alliance News Ltd. All Rights Reserved.
