7th Feb 2025 08:55
(Alliance News) - Stock prices in London opened mixed on Friday, with investors pausing for breath after a UK interest rate and ahead of a US jobs report.
Trade war tensions initially kept a lid on stocks at the start of the week, but the equity market then grew in confidence and the FTSE 100 hit its best-ever level.
The blue-chip index traded down just 2.16 points at 8,725.12. It achieved a record close on Thursday, The FTSE 250 rose 50.17 points, 0.2%, at 21,023.30. The AIM All-Share was up 1.30 points, 0.2%, at 722.14.
The Cboe UK 100 was down 0.3% at 873.34, the Cboe UK 250 rose 0.2% to 18,350.45, and the Cboe Small Companies was down 0.1% at 15,679.12.
In Frankfurt, the DAX 40 was 0.1% higher, while the CAC 40 added 0.2%.
The pound rose to USD1.2458 early Friday, from USD1.2444 at the time of the London equities close on Thursday. The euro was higher at USD1.0398 from USD1.0375. Against the yen, the dollar slipped to JPY151.78 from JPY151.82.
The economic calendar for Friday has US nonfarm payrolls data at 1330 GMT.
According to FXStreet cited consensus, the report is expected to show US hiring eased to 170,000 at the start of the year, from 256,000 in December.
"The payrolls report can trigger a large market impact. This is mostly felt in the stock market, the currency market has a milder response to the NFP data. In the past 12 months, the dollar index has barely budged on average, in the 1 hour after the release. This is to be expected, since currencies are driven by a large variety of factors. However, it is worth watching the dollar today, especially since the revisions could impact the market's view on what the Fed does later this year," XTB analyst Kathleen Brooks commented.
"At the end of the week, the market is digesting some mixed tech results, and comments from the new Treasury Secretary in the US, Scott Bessent, who said that he favours a strong dollar and will not alter the government's debt issuance plans for this year. This is a rare bit of continuity from the new President's administration, which could calm the markets at the end of this week. It is worth noting that so far this week, European stocks are outperforming US stock indices, and the dollar is the second weakest currency in the G10 FX space, just behind the pound. There is a lot of uncertainty around this jobs report, so we could see the markets react strongly."
Sterling recovered some lost ground in the dollar after falling following the BoE decision.
The BoE's Monetary Policy Committee voted 7 to 2 for the expected quarter-point cut which takes bank rate to 4.50%, from 4.75%.
All members of the MPC backed a cut in interest rates. Two members Swati Dhingra, and previous 'hawk' Catherine Mann, preferred a larger 50 basis points cut, which would have taken base rate to 4.25%.
Deutsche Bank analyst Sanjay Raja commented: "We now think the chances of a May rate cut have risen meaningfully. As such, we see the MPC cutting bank rate one more time in H2-25 (May) – though this remains a very close call and will be predicated on inflation broadly evolving in line with the MPC's projections. And we stick to our call for three rate cuts in H2-25, taking the total quantum of rate cuts expected this year to five (from four). We still see terminal bank rate at 3.25% in Q1-26."
In London, Legal & General shot up 6.5%. It jumped on Friday after it said it would return an extra GBP1 billion to shareholders after agreeing to offload its US insurance entity.
The London-based insurer is selling the US business for USD2.3 billion to Japanese mutual life insurance firm Meiji Yasuda Life Insurance.
The duo will establish a "strategic partnership" and Meiji Yasuda may snap up a stake in L&G.
The FTSE 100 listing said more than half of the deal proceeds will be returned to shareholders. L&G expects the transaction to complete towards the end of 2025.
Chief Executive Antonio Simoes called it a "transformative transaction" that brings "significant strategic and financial benefits".
"Following completion, Meiji Yasuda will own L&G's US protection business and have a 20% economic interest in its US PRT business, with L&G retaining 80% of existing and new PRT through reinsurance arrangements between L&G and Meiji Yasuda," L&G explained.
Wizz Air rose 5.2%. HSBC raised the budget carrier to 'buy'.
International Workplace Group added 4.1% after Barclays raised it to 'overweight' from 'equal-weight'.
Handbag seller Mulberry rose 5.3% after Barclays resumed coverage of the stock at 'equal-weight'.
JPMorgan Global Growth & Income and Henderson International Income Trust said they have agreed a combination, potentially creating an investor with GBP3.4 billion worth of net assets.
As part of the proposed deal, a scheme of reconstruction will see HINT's assets rolled into JGGI. In exchange, HINT shareholders will receive new JGGI shares. There is no cash option proposed "in light of the strong rating and liquidity of JGGI's shares, and the similarity of the investment strategies, with both companies offering exposure to global equities and an attractive level of income".
Last year, JGGI combined with JPMorgan Multi-Asset Growth & Income and back in 2022, sealed a tie-up with JPMorgan Elect PLC and Scottish Investment Trust.
JGGI shares fell 0.4%. HINT added 7.4%.
A barrel of Brent was higher at USD74.90 early Friday from USD74.71 at the time of the London equities close on Thursday. An ounce of gold rose to USD2,864.14 from USD2,851.18.
By Eric Cunha, Alliance News news editor
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