6th Feb 2023 07:45
(Alliance News) - Stocks in London were called lower on Monday, after a stronger-than-expected US jobs print on Friday that investors fear may provoke the hawks at the Federal Reserve.
According to the Bureau of Labor Statistics on Friday, US nonfarm payrolls rose by 517,000 in January, almost double the 260,000 seen December. January's number was well-ahead of the consensus of 185,000, according to FXStreet.
"To tell whether the latest jobs data is bad news - because the tight labour market continues boosting inflation - or good news - inflation remains on an easing path despite the rock-solid jobs market - we will have to wait until next Tuesday, when the US will reveal the January [consumer price index] report," said Swissquote Bank senior analyst Ipek Ozkardeskaya.
"Until fresh news, Friday's jobs data is bad news for the market."
In early corporate news, Croda agreed to buy a South Korean beauty actives firm, while Vesuvius was struck by a cyber attack.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: called down 33.2 points, 0.4%, at 7,868.6
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Hang Seng: down 2.2% at 21,187.57
Nikkei 225: closed up 0.7% at 27,693.65
S&P/ASX 200: closed down 0.3% at 7,539.00
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DJIA: closed down 127.93 points, or 0.4%, at 33,926.01
S&P 500: closed down 43.28 points, or 1.0%, at 4,136.48
Nasdaq Composite: closed down 193.86 points, or 1.6%, at 12,006.96
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EUR: down at USD1.0790 (USD1.0844)
GBP: down at USD1.2064 (USD1.2093)
USD: up at JPY131.84 (JPY130.94)
GOLD: up at USD1,877.97 per ounce (USD1,867.11)
OIL (Brent): down at USD80.14 a barrel (USD81.44)
(changes since previous London equities close)
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ECONOMICS
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Monday's key economic events still to come:
11:00 CET EU retail trade
09:30 GMT UK construction purchasing managers' index
10:00 EST US employment trends index
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Manufacturing orders in Germany increased in December from November, figures from Destatis showed, due to a jump in large-scale orders. On a seasonally and calendar adjusted basis, real new orders in manufacturing rose 3.2% in December from the month before, compared to a 4.4% monthly fall in November. Excluding large-scale orders, there was a 0.6% monthly decline in December. On an annual basis, orders fell 10.1% in December, compared to 10.2% in November.
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UK National Health Service leaders have warned the service is facing its worst day of disruption yet as tens of thousands of nurses and ambulance staff in England are set to walk out in support of pay claims. Monday's industrial action – expected to be the biggest strike in the history of the NHS – marks the first time the two groups have staged stoppages on the same day during the current wave of disputes convulsing public services. It prompted NHS Providers – which represents trusts – to urge the public to use emergency services "wisely" as it warned the whole service was approaching a "crunch point".
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BROKER RATING CHANGES
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Bernstein raises Diageo to 'outperform' (market-perform) - 4,200 (4,030) pence
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Barclays cuts Virgin Money to 'equal weight' (overweight) - price target 230 pence
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Credit Suisse cuts Hargreaves Landsdown to 'underperform' (neutral) - price target 800 (900) pence
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COMPANIES - FTSE 100
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Speciality chemical company Croda International agreed to acquire South Korean biotechnology-devised beauty actives firm Solus Biotech for KRW350 billion, or around GBP232 million. The purchase will provide Croda with access to Solus' ceramide and phospholipid technologies, and growing capabilities in natural retinol. Croda said the acquisition will boost its exposure to "targeted prestige segments" as well as its Asian manufacturing capabilities.
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COMPANIES - FTSE 250
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Vesuvius said it is managing a cyber incident, which has involved unauthorised access to its systems. The molten metal flow engineering company said it has taken steps to investigate and respond to the incident, and is working with experts to understand the extent of the issue. "We are taking steps to comply with all relevant regulatory obligations in light of the information that emerges from our ongoing investigations," the firm said.
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Gaming provider Playtech said it is seeking a declaration from English courts to settle a disagreement between itself and partner Caliplay. Playtech said it is seeking clarification over whether Caliplay can still exercise an option to redeem the additional services fee element of their strategic agreement. In the six months to June 30 last year, the services fee amounted to EUR34.4 million. Playtech maintains the option has expired, and Caliplay disagrees, though it has not sought to exercise the option.
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3i Infrastructure announced a proposed placing of new shares at 330 pence each. The infrastructure investment firm didn't say the amount it hopes to raise but said the funds will be used to pay down drawings on its revolving credit facility, and as liquidity for future investment. The placing price represents a 3.4% discount to its closing share price on Friday. At the end of 2022, the company had drown GBP555 million from its RCF, and held cash of GBP75 million, leaving undrawn commitments of GBP345 million. In the period since, the firm paid of interim dividends to the tune of GBP50 million. "Overall, the portfolio continues to perform well and the demand for infrastructure assets is strong," 3i said.
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OTHER COMPANIES
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IOG said the remediation of its A2 well at the Southwark gas field in the UK southern North Sea managed to reduce water production by isolating certain zones. However, the perforations have failed to bring about the expected improvement in gas rates, which have been limited to 2.5 million standard cubic feet per day. The firm will now suspend the A2 well, and consider alternative longer-term remediation strategies and cycled production. "We are clearly very disappointed with the Southwark A2 outcome, which is a very significant departure from our plans and expectations. We are already working hard to incorporate the data and learnings from A2 into the A1 well plan and will assess the implications for other similar assets in our portfolio," said CEO Rupert Newall.
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By Elizabeth Winter, Alliance News senior markets reporter
Comments and questions to [email protected]
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DiageoHargreaves LansdownVirgin Money UkVesuviusPlaytechCroda International3i InfrastructureIOG.L