17th Apr 2015 09:54
(An item published at 1041 BST misstated eurozone consumer price index for February)
LONDON (Alliance News) - UK stocks are posting modest gains mid-morning Friday, as UK unemployment figures met expectations by falling to its lowest level in almost seven years.
The UK unemployment rate fell to the lowest level since 2008, data from the Office for National Statistics showed. The ILO jobless rate came in at 5.6% in the three months to February, down from 5.8% in September to November. The rate came in line with expectations.
The ONS also said that the employment rate rose to 73.4% in the period, marking the highest figure on record. The rate was 72.4% at the same time last year.
Average earnings of employees increased 1.7% including bonuses. It was forecast to rise by 1.8%. Excluding bonuses, earnings rose 1.8% in three months to February, surpassing expectations of a rise of 1.7%, and higher than the 1.6% rise seen in the three months to January.
The pound rose to its highest level against the dollar in four weeks, touching a high of USD1.5036. It currently trades at USD1.5021. However, investors will be looking to US inflation figures at 1330 BST, which could see the dollar regain its strength, or fall to further lows.
The FTSE 100 trades up 0.4% at 7,090.41, the FTSE 250 is up 0.2% at 17,771.76, and the AIM All-Share is trading up 0.2% at 750.88.
In Europe, the CAC 40 in Paris trades up 0.1%, and the DAX 30 in Frankfurt is down 0.2%.
Eurozone consumer prices met expectations to show a year-on-year fall of 0.1% in March, from a 0.3% fall in February. Core consumer prices also met economist forecasts by growing 0.6% year-on-year in March.
Concerns about Greece's finance remain in focus after the International Monetary Fund ruled out allowing the cash-strapped country to delay scheduled debt repayments, while the European Commission voiced dissatisfaction over talks with Athens to solve Greek financial woes.
IMF chief Christine Lagarde said that a delay in Greek payments would constitute "additional financing" to Athens. A delay would be "clearly not a course of action that would...be recommendable" to the IMF's board, she said. "We have never had an advanced economy ask for payment delays," Lagarde said.
Notes UBS economist Reinhard Cluse: "Although time is running short, there are clear indications that the Eurogroup meeting in Riga on 24 April might not bring a breakthrough. In the absence of a deal in the next few weeks, the government might not be able to avoid default, which ? we fear ? would likely raise the risk of Grexit. After all, the [European Central Bank] might have to stop its Emergency Liquidity Assistance (ELA) at a time when the Greek banking system would likely suffer increased deposit outflows."
On the UK corporate front, Roll-Royce shares are amongst the top gainers in the FTSE 100, up 2.0%, after the aerospace engineer confirmed it has won its largest ever order, worth USD9.2 billion, to provide engines and support services to Dubai-based airline Emirates. Under the deal, it will provide Trent 900 engines and TotalCare service support to the company, with the engines to power 50 Airbus A380 aircraft due to enter service in 2016.
Pearson, up 1.7% is one of the best performers in the FTSE 100, after closing as the biggest faller on Thursday on a Wall Street Journal report Wednesday that the Los Angeles school district is to end its use of content provided by Pearson under the Common Core Technology Project.
Broker ratings changes are driving the movers in the FTSE 250 Friday. Hunting is the best performer after it was raised to Conviction Buy from Buy by Goldman Sachs, which also raised its price target on the oil services company to 709.00 pence from 622.00p. Hunting trades up 5.8% at 636.50p.
Qinetiq Group is up 5.6% after Barclays raised it to Overweight from Equal Weight, while Rotork is down 2.7% after the bank cut it to Equal Weight from Overweight. Debenhams is up 4.7% as Citigroup raised it to Buy from Neutral, following the company's interim results on Thursday.
Aside from US inflation numbers there is the US Reuters/Michigan consumer sentiment index at 1900 BST, after the close of London stock markets.
Futures point to a lower open on Wall Street, with the DJIA, S&P 500 and Nasdaq 100 all pointed down 0.2%.
By Neil Thakrar; [email protected]; @NeilThakrar1
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