9th Aug 2024 09:28
(Alliance News) - Stock prices in London opened higher on Friday, looking to end a volatile week for markets on a positive note following better jobs figures from the US.
A below-expected US nonfarm payrolls report for July on Friday last week set off a global sell-off in markets, but the weekly initial jobless claims report on Thursday provided reassurance.
In the week ending August 3, the advance figure for seasonally adjusted initial claims decreased to 233,000, the Department of Labor said. The reading from the prior week was revised slightly upwardly to 250,000 from 249,000. The latest reading however came in below FXStreet-cited market consensus of 240,000.
The report "changed the narrative", commented Antonio Ernesto Di Giacomo, senior market analyst at XS.com, suggesting the US economy is stronger than many feared.
"The drop in jobless claims indicates that more people are finding and keeping jobs, a positive indicator amid economic uncertainties," he said.
The FTSE 100 index opened up 36.75 points, 0.5%, at 8,181.72. The rise puts the blue-chip index about flat for the week.
The FTSE 250 was up 89.78 points, 0.4%, at 20,598.36, and the AIM All-Share was up 1.14 points, 0.2%, at 766.35.
The Cboe UK 100 was up 0.4% at 815.87 points, the Cboe UK 250 was up 0.6% at 26,476.45, but the Cboe Small Companies was down 0.2% at 24,693.34.
In European equities on Friday, the CAC 40 in Paris was up 0.3%, while the DAX 40 in Frankfurt was up 0.2%.
The dollar was lower early Friday.
Sterling was quoted at USD1.2763, up from USD1.2720 at the London equities close on Thursday. The euro traded at USD1.0922, higher than USD1.0907 late Thursday. Against the yen, the dollar was quoted at JPY147.16, flat from JPY147.17.
Wall Street ended higher on Thursday following the jobless claims report. The Dow Jones Industrial Average closed up 683.04 points, 1.8%, at 39,446.49. The S&P 500 closed up 2.3% at 5,319.31, and the Nasdaq Composite closed up 2.9% at 16,660.02.
Asia followed the US mostly higher on Friday. The Nikkei 225 index in Tokyo closed up 0.6%. The Hang Seng index in Hong Kong closed up 1.2%, but the Shanghai Composite closed down 0.3%. The S&P/ASX 200 in Sydney closed up 1.3%.
Consumer price inflation in China was stronger than expected in July, hitting a five-month high, providing some positive news on the world's number-two economy, as with officials in Beijing try to boost consumer buying.
The 0.5% annual increase in the consumer price index accelerated from 0.2% in June and marked the sixth straight month of rising prices, according to the National Bureau of Statistics. China endured a period of deflation between October to January, when sliding prices of goods and services heightened worries of an economic slowdown.
July's reading – which beat market forecasts in a survey by Bloomberg – represents the fastest rise in consumer prices since February, when the index increased 0.7% year-on-year.
In London early Friday, Hargreaves Lansdown shares were up 2.0% to 1,099.00 pence after agreeing to a takeover offer from a private equity consortium led by CVC. The offer at 1,140p per share, including a 30p final dividend for financial 2024, values the wealth management platform at GBP5.44 billion in total.
Hargreaves separately reported its annual results on Friday. Pretax profit was GBP396.3 million in the 12 months that ended June 30, down 2% from GBP402.7 million in financial 2023. Revenue was GBP764.9m, up 4% from GBP735.1m. Assets under administration totalled GBP155.3 billion, up 16% from GBP134.0 billion a year before. Its total dividend for the year is 43.2p, up 4% from 41.5p.
However, leading the FTSE 100 index early Friday was gambling operator Entain, shares up 3.6%.
Entain on Thursday said its pretax loss narrowed dramatically to GBP27.6 million in the first half of 2024 from GBP448.1 million a year prior, as one-off costs fell away and revenue rose by 6.0%. The company also raised its annual guidance.
In the FTSE 250, Bellway was up 2.3%.
The house builder provided a trading statement ahead of its annual results on October 15. In the financial year that ended July 31, total housing completions declined to 7,654 at an average selling price of GBP308,000 from 10,945 at GBP310,306 in financial 2023. However Bellway said both figures were slightly ahead of previous guidance.
"The relative stability of mortgage rates has...reignited some customer buying interest, and it seems that the pressure on rates amid a healthily competitive arena will be downwards," commented Richard Hunter, head of Markets at interactive investor.
"Despite a cut to the dividend in July, Bellway still yields 4.2%, which is of some attraction to income-seeking investors."
Publisher Future was down 0.8% to 1,059.00p, after Canaccord cut the stock to 'sell' from 'hold', with a price target of 733p.
Food ordering platform Just Eat Takeaway was up 5.8%, after Morgan Stanley raised the stock to 'overweight' from 'equal-weight'.
Gold was quoted at USD2,423.56 an ounce early Friday, higher than USD2,415.11 late in London on Thursday.
Brent oil was trading at USD79.03 a barrel early Friday, up from USD78.92.
Still to come on Friday's economic calendar are industrial production figures from Ireland at 1100 BST.
By Tom Waite, Alliance News editor
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