22nd Oct 2013 10:00
LONDON (Alliance News) - London's equity markets and European peers are mixed Tuesday morning, while major foreign exchange cross rates are rangebound as markets await the delayed September US non-farm payroll reading due at 1330 BST.
By mid-morning Tuesday the FTSE 100 was up 0.1% at 6,661.60, the FTSE 250 was down 0.3% at 15,474.60 and the AIM All-Share was flat at 802.70. The French CAC40 and the German DAX are both down about 0.1%, while the pound, which has barely moved since the start of the week, is trading at USD1.6125. The gold price is also fairly stable ahead of the US numbers, down just 0.2% at USD1,311.00 an ounce.
The US payroll numbers were delayed from last week by the government shutdown. Consensus forecasts are for a figure of 180,000, and an unchanged 7.3% unemployment rate.
Reckitt Benckiser is the standout gainer on the FTSE 100 in morning trade, rising 5.9% after the consumer goods company said third-quarter sales rose 5% on a like-for-like basis. It also announced a strategic review of its pharmacy division, which analysts suggests may lead to a sale, with an announcement due in 2014.
ARM holdings is the biggest blue chip faller. The semiconductor and software company is down 3.2% despite the company posting higher third-quarter pretax profit. Analysts are citing a sharp slowdown in royalty growth, with public domain royalty growth at 12%-14% having averaged 26% year-on-year over the past four quarters.
The latest UK debt numbers showed that the budget deficit narrowed in September. Public sector net borrowing came in at GBP11.1 billion, down from GBP12.1 billion seen the year previously. The Office of National Statistics said the figure did not include the GBP3.2 billion received in cash from the sale of Lloyds shares in September. Analyst have suggested that the deficit reduction is partly explained by increased tax from the recovering UK housing market.
The surprise improvement to to UK finances would normally provide a boost to the pound. "Going forward, we expect markets will become increasingly conscious as to traditional gauges of currency performance with measures such as relative current accounts coming to the forefront of analysis once more", says Rabobank Director Christian Lawrence. However, for now trader focus is firmly fixed on the 1330BST non-farm release from the US.
The delayed September reading will not include any of the period that the government was shutdown and anything other than a very strong surprise to the upside is likely to keep the dollar at weaker levels, argues Rabobank analyst Michael Every. "A weak report is likely to be positive for bonds by reaffirming that Fed tapering is clearly off the table for a considerable period. That will also lift equities too, no doubt, while undermining the USD further."
By Jon Darby; [email protected]; @jondarby100
Copyright 2013 Alliance News Limited. All Rights Reserved.
Related Shares:
RB..LARM.L