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LONDON MARKET MIDDAY: Stocks mostly down ahead of US nonfarms

8th Mar 2024 11:49

(Alliance News) - Stock prices in London were mostly in the red at midday Friday, as investors nervously look ahead to a key US unemployment reading this afternoon.

The FTSE 100 index was down 20.94 points, 0.3%, at 7,671.52. The FTSE 250 was down 68.68 points, 0.4%, at 19,515.30, and the AIM All-Share was up 1.71 points, 0.2%, at 739.61.

The Cboe UK 100 was down 0.4% at 768.51, the Cboe UK 250 was down 0.5% at 16,879.99, and the Cboe Small Companies was down 0.1% at 14,741.07.

In European equities on Friday, the CAC 40 in Paris was up 0.2%, while the DAX 40 in Frankfurt was down 0.1%.

All eyes are on the US non-farm payroll report for February is due at 1330 GMT on Friday.

According to FXStreet, employment growth is to ease to 200,000, from 353,000 in January. The unemployment rate is expected to stay put at 3.7%.

"Later today, non-farm payrolls data from the US will offer insight into the US labour market where conditions have been tighter than anticipated in recent months. A higher reading than the 198,000 forecast might undo some of the optimism engendered by Powell's comments," said AJ Bell's Russ Mould.

The Fed "can and will" begin cutting interest rates this year if current economic trends continue, the head of the US central bank told lawmakers in Washington on Thursday.

"What we're seeing is continued strong growth, strong labour market and continuing progress in bringing inflation down," Powell told the US Senate Banking Committee on the second day of hearings on Capitol Hill.

Swissquote Bank analyst Ipek Ozkardeskaya said Powell "sounded more confidently dovish" than European Central Bank President Christine Lagarde.

Lagarde said policymakers have only "just begun" talk on "dialling back" the ECB's restrictive monetary policy stance.

As far as rate cuts go, Lagarde's comments suggest the wait will end in June at the earliest. She said policymakers have a "little more data" to mull over by the April decision, but "a lot more" in June.

Following the ECB decision, there was some economic data from the eurozone to digest on Friday.

The eurozone was stable in the fourth quarter of 2023, whilst employment edged up, according to Eurostat on Friday.

In the fourth quarter of 2023, seasonally adjusted GDP remained stable in the eurozone, compared with the previous quarter. This was in line with FXStreet market consensus and the third quarter.

The number of employed people in the eurozone increased by 0.3% in the eurozone in the final quarter of 2024, in line with expectations. In the third quarter, a 0.3% increase was also registered.

The pound was quoted at USD1.2837 at midday on Friday in London, higher compared to USD1.2793 at the equities close on Thursday. The euro stood at USD1.0933, down slightly against USD1.0934. Against the yen, the dollar was trading at JPY147.09, lower compared to JPY148.09.

In the FTSE 100, DS Smith rose 5.6% whilst Mondi lost 2.6%.

Mondi and its packaging peer DS Smith have reached an agreement in principle that will see Mondi take over DS Smith in a proposed all-share deal.

In a statement dated Thursday, but was released on Friday, Mondi said the possible merger that would create a company worth more than GBP10 billion is subject to regulatory clearance and mutual confirmatory due diligence.

In terms of the agreement, Mondi shareholders would own 54%, while their DS Smith counterparts would hold 46%.

In the FTSE 250, Just Group shot up 12%.

The Surrey, England-based financial services firm provides retirement income products and services to individual and corporate clients.

It reported insurance revenue of GBP1.56 billion in 2023, up 17% from GBP1.33 billion in 2022.

Just Group's net investment result came to GBP273 million, swung from a loss of GBP454 million, while its insurance service result was GBP118 million, up from a restated GBP99 million.

Pretax profit was GBP172 million last year, swung from a loss of GBP494 million in 2022.

On the back of the results, Just Group declared a final dividend of 1.50 pence, up from 1.23p year-on-year. Total dividend was 2.08p, up 15% from 1.73p.

On AIM, Mattioli Woods surged 33%, after it accepted a GBP432 million takeover offer from Pollen Street Capital funds.

Mattioli is a Leicester, England-based specialist wealth and asset management business, whilst Pollen Street is a London-based asset manager.

Under the terms of the acquisition, Mattioli Woods shareholders will receive 804p in cash. This represents a 34% premium to the closing price of 600p per share on March 7.

Mattioli CEO Ian Mattioli said: "We have a strong track record of combining like-minded businesses that share the same culture and ethos of putting clients first. The team at Pollen Street Capital share our passion for delivering exceptional client outcomes and have demonstrated their ability to partner with entrepreneurial financial services business. I believe that with Pollen Street Capital's support and access to capital we can accelerate the delivery of our strategy and provide our clients with the proactive advice and bespoke investment solutions they require."

Stocks in New York were called to open mixed. The Dow Jones Industrial Average was called down 0.1% However, the S&P 500 index and the Nasdaq Composite were both called up 0.1%.

Brent oil was quoted at USD82.70 a barrel at midday in London on Friday, down from USD82.80 late Thursday. Gold was quoted at USD2,168.55 an ounce, higher against USD2,155.87.

By Sophie Rose, Alliance News senior reporter

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