- Blue-chip index to close 21 points lower
- DS Smith jumps 6% on Mondi purchase
- Melrose, Entain and Rentokil top fallers
15:57pm: FTSE 100 to close lower despite DS Smith rally
The FTSE 100 is set to close out Friday around 21 points lower after better-than-expected US employment figures failed to stimulate a rally.
DS Smith has been the lead riser and is set to close 6% higher after it confirmed it had accepted a purchase bid from fellow packaging maker Mondi.
Steve Clayton, head of equity funds at Hargreaves Lansdown, said: "Investors in both companies have been left to figure out if they are going to be sufficient to merit DS Smith investors giving up control of the group and Mondi investors roughly halving their exposure to the assets they currently own.
"This does not look like a deal-making trend that is likely to catch on."
Lead fallers included Entain (-4%) Rentokil (-3%) and Melrose (-2.%), which all experienced falls after releasing trading updates on Thursday.
In the US markets are trading higher after its non-farm payroll figures came in higher than expected for February, leading analysts to double down on their predictions of a June rate cut.
15:32pm: Global merchandise trade struggles to lift from 2023 slump
Global merchandise trade has been unable to significantly accelerate out of a dip which occurred last year, the World Trade Organisation said.
The WTO's good barometer marginally dropped to 100.6 from 100.7 at the end of November, according to the group's latest data.
A baseline of 100 indicates quarterly growth in line with medium-term trends.
“This suggests that merchandise trade should continue to recover gradually in the early months of 2024, but any gains could be easily derailed by regional conflicts and geopolitical tensions,” the WTO said in its report.
Areas such as export orders and air freight volumes have highlighted signs of positive growth, while container shipping and raw materials continue to lag behind expectations.
15:04pm: US rate cut in June likely
Analysts believe the latest US jobs data raises the likelihood of the Fed cutting rates in June.
Charles Hepworth at GAM Investments said: "If we are genuinely seeing the unemployment rate having troughed and moving higher and wage growth slowing, then it obviously pushes the door for rate cuts open wider.
"This was a softer than expected jobs report and raises the likelihood of the Federal Reserve cutting rates in June."
Economists also believe there is "less reason for concern" regarding jobs driving inflation.
Andrew Hunter, Capital Economics' deputy chief US economist, said: "The 275,000 rise in non-farm payrolls in February may, at face value, add weight to the Fed’s view that there is no rush to start cutting interest rates, but the downward revisions to previous months’ gains leave recent growth looking less strong than previously thought.
"Alongside the rise in the unemployment rate to a two-year high and a much weaker rise in wages, there is less reason now to be concerned that renewed labour market strength will drive inflation higher again."
14:40pm: Wall Street opens flat as revised US NFPs garner attention
Wall Street opened relatively flat on Friday, following US non-farm payrolls coming in slightly better than expected.
The Dow Jones is trading flat at 38,796, while the S&P is up around 9 points and the Nasdaq has lifted 61 points higher.
It comes as NFPs rose 275,000 last month, beating out the market predictions of a 200,000 jump.
February's unemployment rate came in at 3.9%, slightly higher than the 3.7% that was forecast.
John Lieper, chief investment officer at Titan Asset Management said: “US economic resilience continues as evidenced by today’s gangbuster nonfarm payroll report which came in above expectations.
"However, the big news story is the sizeable downward revision to last month’s reading, from 353K to 229K, corresponding increase in the unemployment rate from 3.7% to 3.9% and slightly weaker wage growth.
"On a net basis this keeps rate cuts on the table. The two-year Treasury yield is lower and equity futures are up. Equities have pivoted from the prior, somewhat narrow focus on monetary policy, towards positive economic surprises and upbeat earnings but today’s data will help support these ongoing tailwinds. “
14:31pm: Pension derisking provides boost for Just Group and L&G
Pension de-risking is bigger business than ever, going by a flurry of updates from insurance firms big and small this week.
At the upper echelons of the FTSE set, de-risking deals effectively saved British insurance big cap Legal & General's skin.
Pension de-risking deals, or PRTs, are financial arrangements where a pension scheme transfers some or all of its liabilities and risks to an insurer.
PRTs have also featured prominently in FTSE 250-listed annuities provider Just Group Friday results, with the DB de-risking business for the year ended 31 December 2023 reaching £3.4 billion, up 21% from the previous year.
Shares in Just Group are up around 12% on Friday, leading the FTSE 250 risers.
This growth was achieved through 80 transactions, compared to 56 in 2022.
Just attributed some of this success to its bulk quotation service, which gained popularity among employee benefit consultants, and its focus on both smaller schemes and larger transactions.
“Just is experiencing strong market demand for defined benefit de-risking solutions from pension schemes,” said the company.
13:41pm: Non-farm payrolls beat guidance to increase by 275,000
Non-farm payrolls increased by 275,000 in February, beating out the market consensus of 200,000 jump.
February's unemployment rate came in at 3.9%, slightly higher than the 3.7% that was forecast.
It means unemployment in the US is at its highest rate since January 2022.
There were also revisions made to the previous two months, with January payrolls reduced to a rise of 229,000 and December's figures changed to 290,000.
Analysts have said today's figures further solidify the prospect of a June rate cut.
Wall Street appeared to react positively to the news in pre-market trading, with the Dow Jones now set to open flat.
The FTSE 100 also lifted slightly from Friday's lows, with the index now around 30 points lower.
13:18pm: FTSE 100 down ahead of US non-farm payrolls
The FTSE 100 is down 42 points as it braces for non-farm payroll figures from across the pond.
Read Our Preview: US Nonfarm Payrolls - What The Banks Are Saying - LiveSquawkhttps://t.co/x5uKZ2Z4Gs pic.twitter.com/MdHwmBkbq3
— LiveSquawk (@LiveSquawk) March 8, 2024
Wall Street is expected to open slightly lower, with the Dow Jones forecast to slip 108 points as the markets eagerly awaited key non-farm payroll data in the US.
The data, which will reflect US unemployment levels in February, is expected to be steady with last month’s figures.
As per XTB’s Kathleen Brooks, a 200,000 increase in payrolls over February is expected, with unemployment remaining steady at 3.7%
12:50pm: Gender equality in finance industry moving at "snail's pace"
A report from the Treasury Committee released this International Women’s Day has provided a strong reminder of the sexism and harassment issues women continue to face in the City of London.
The report warned that improvements are happening at “a snail’s pace” as it calls for the end of an “era of impunity”.
Chair of the Treasury Committee Harriett Baldwin commented: "The UK’s financial services sector is the crown jewel of this country’s economy – admired by the international community and always takes pride in being ahead of the curve.
“This well-paid sector will only be able to maintain its competitive advantage if it is able to draw on the widest possible pool of talent.
“We also know that more diverse organisations perform better, so inaction is not only immoral but bad for growth and business.”
12:35pm: FTSE 100 continues to shed value as Rentokil, Melrose and Entain tumble
The FTSE 100 has dropped 40 points lower after falls from Rentokil, Entain and Melrose continued to offset a 6% surge in DS Smith's shares.
DS Smith's jump comes after fellow packaging rival Mondi confirmed a takeover bid had been accepted, paving the way to create a £10 billion industry giant.
On the other end, Rentokil dropped 4% after the pest control expert rallied close to 15% on Thursday.
The share price surge came after the group's strong revenue forecasts helped mute concerns regarding its US operations.
Similarly, Melrose's 4% slip came after it published results on Thursday, albeit slightly more negatively recieved than Rentokil's.
The manufacturing group raised its profit expectations for the year ahead after reporting better-than-expected results for 2023.
Entain also dropped around 3.5% as it continues to suffer from the fallout of a £40 million hit to earnings due to new slot limit rules being introduced in the UK and the Netherlands.
12:17pm: Aviva boss given senior role on BP board
Aviva boss Amanda Blanc is going from strength to strength after it was announced she will taking a senior board position at BP.
In the first boardroom shakeup at the oil giant, since CEO Bernard Looney left, Blanc will become a senior independent director.
Blanc was appointed to BP's board as a non-executive director in September 2022 and is a member of the group's governance and people committee.
The switch will take place at BP's AGM in April and will see Blanc replace Paula Reynolds, who exits after nine years on the board.
It comes a day after Insurer Aviva posted well-received full-year results that exceeded its operating profit target in 2023 with a 9% increase to £1.47 billion, up from £1.35 billion in 2022.
Chief executive, Dame Amanda Blanc, used the strong results to tout the insurer’s successes while nixing lingering rumours of international takeover interest.
11:56am: Economists celebrate International Women's Day
Gita Gopinath, IMF deputy, offers so words of advice on International Women's Day
Happy International Woman’s Day! Some bits of career advice from me… pic.twitter.com/7ibPi1qaI8
— Gita Gopinath (@GitaGopinath) March 8, 2024
11:33am: Gold hits all-time highs as gas price rise
Gold prices have hit another all-time high, having risen for the eighth consecutive day as it enjoys its best week in the last five months.
Spot gold prices are up 0.5%, breaking the US$2,170 an-ounce mark for the first time as a drop in interest rates pushes investors to find safer assets.
Analysts predict gold could reach £2,300 within the next twelve months.
Gas prices are also on a rip, with wholesale prices set to jump for the second consecutive week.
It comes as Europe begins to stockpile for winter, with the benchmark contract rising as much as 3.1% today to around €26 per megawatt hour.
Prices fell to their lowest levels in nearly three years at the end of February, and despite today's spike it remains significantly below the peaks seen when Russia invaded Ukraine.
10.52am: FTSE 100 lower as markets await key US job data
The FTSE 100 was down 28 points at 7,663 on Friday morning as the markets eagerly awaited key non-farm payroll data in the US.
The data, which will reflect US unemployment levels in February, is expected to be steady with last month’s figures.
As per XTB’s Kathleen Brooks, a 200,000 increase in payrolls over February is expected, with unemployment remaining steady at 3.7%.
Average hourly earnings growth is tipped to moderate meanwhile, coming in at 0.2% for February, compared to 0.6% in January.
“This data is worth watching,” Brooks commented, “if the data comes in line with expectations, or below forecasts, this would be seen as a positive development".
This could see Treasury yields fall alongside the dollar and stocks to continue to rally, she explained.
“If there is an upside surprise, then risk sentiment may falter,” Brooks added.
Last month, payrolls increased by 353,000, well above forecasts for a 180,000 jump.
10.39am: Eurozone just avoids recession
The Eurozone narrowly avoided slipping into technical recession late last year, as growth in the final quarter remained flat.
As per Eurostat, gross domestic product (GDP) was unchanged in the Eurozone over the final three months of the year, following a 0.1% contraction in the previous period.
Eurozone GDP increased by 0.4% over the whole year, Eurostat added, with Denmark penning the largest growth, of 2%, and Ireland seeing the biggest contraction, of -3.4%, in the final quarter.
Euro area #GDP stable in Q4 2023, +0.1% compared with Q4 2022 https://t.co/SCCzhj7AiA pic.twitter.com/DBIk4WbPJT
— EU_Eurostat (@EU_Eurostat) March 8, 2024
9.59am: BP ex-boss Bernard Looney repays half of bonus
Ousted BP chief executive Bernard Looney has repaid the oil firm hundreds of thousands of pounds worth of his final annual bonus.
Some £420,000, equating to 50% of Looney’s 2022 bonus, has now been given back, BP said in its annual report on Friday.
Looney resigned last September over several romantic affairs with colleagues, which BP found he had knowingly mislead it about.
BP then formally dismissed Looney in December over “serious misconduct”.
Looney’s replacement, Murray Auchincloss, was paid just over £8 million last year meanwhile, after stepping up in September and being permanently appointed in January.
9.38am: DS Smith soars on news of Mondi takeover
DS Smith shares gained 7% on Friday morning after the packaging firm announced a £5.1 billion takeover by Mondi.
Shares will be priced at 373p each, at a 33p premium for DS Smith investors, under the deal, which will create one of the world’s largest packaging companies.
“The combination is an exciting opportunity to create a pan-European industry leader in paper-based sustainable packaging solutions,” DS Smith told shareholders on Friday.
“[This would be] with complementary geographic footprints, leading customer relationships, a strong balance sheet and cash flow profile, and the potential to deliver substantial benefits to respective shareholders, customers, employees and related stakeholders.”
Mondi would own 54% of the merged business, with DS Smith holding the remaining 46%.
DS Smith climbed 7.3% to 348.90p on the news.
9.20am: Tate & Lyle, Whitworths tie-up could inflate sugar prices - regulator
A proposed tie-up between Tate & Lyle sugar and Whitworths’s owners has drawn scrutiny from the Competition and Markets Authority over fears prices could surge.
According to the body, competition could be harmed by the plan, which was announced in November would see T&L Sugars buy Tereos UK and Ireland’s packed sugar unit.
Such deal could “lead to a substantial lessening of competition,” the CMA warned, with the duo given five working days to offer remedies and avoid a second-phase of investigation.
“The supply of sugar to grocery retailers in the UK is already highly concentrated,” CMA senior director Sorcha O’Carroll noted, with Primark sister brand British Sugar the third and final player in the market.
“This deal would bring together two of the three players in the UK sugar sector, reducing competition and choice further for people and businesses," she said.
“It’s now up to TLS and Tereos to find a way to address our competition concern.”
8.56am: The morning so far
FTSE 100-listed information services provider and events company Informa impressed with its annual results today, with statutory profit before tax shooting up from £168.8 million in 2022 to £492.2 million in 2023.
On the back of solid cash flows, the group announced a full-year dividend that was 84% higher year on year, with an additional £550 million dedicated to share buybacks.
Shares duly rallied 1.7% from yesterday’s close.
British retailers presented some mixed company news.
Currys PLC (LSE:CURY) confirmed the sale of its business in Greece and Cyprus for around £156 million to Public Power Corporation, Greece’s largest electric power company.
PPC will purchase Dixons South East Europe, the holding company for the Greek and Cypriot retail business, which trades under the name Kotsovolos.
Sports Direct owner Frasers Group PLC (LSE:FRAS), meanwhile, announced that its subsidiary Matches Fashion has been put into administration mere months after Mike Ashley’s retail business bought the luxury online retailer in December for £52 million.
“Since Frasers Group acquired MATCHES, the business has consistently missed its business plan targets and, notwithstanding support from the group, has continued to make material losses,” Frasers said in a statement.
Both Frasers and Currys shares were sent lower on the news.
DS Smith was a top mover this morning, adding 6.4% after larger rival Mondi confirmed a £5.14 billion bid for the packaging company.
"The combination is an exciting opportunity to create a pan-European industry leader in paper-based sustainable packaging solutions," the companies said in a joint statement.
The FTSE 100 index was trading 8 points lower at 7,683 at last count.
8.38am: Bitcoin seen above $67,100
Benchmark cryptocurrency bitcoin (BTC) added 0.4% against the US dollar in morning trades, bringing the BTC/USD pair to $67,100 at the time of writing.
It’s still below the $69,000 all-time high penned on Tuesday, but bitcoin bulls appear focused on reclaiming this price point after briefly touching it.
Bitcoin has ripped 59% higher year to date thanks to considerable cash inflows entering the bitcoin exchange-traded fund market.
Back to the London markets, the FTSE 100 is currently trading 14 points lower at 7,677.
8.20am: Currys finalises sale of Greek and Cypriot business
Currys PLC (LSE:CURY) has confirmed the sale of its business in Greece and Cyprus for around £156 million, the electronics retailer said on Friday.
Public Power Corporation, Greece’s largest electric power company, will purchase Dixons South East Europe, the holding company for the Greek and Cypriot retail business, which trades under the name Kotsovolos.
The deal is expected to be completed by April and will see the London-listed retailer receive net cash proceeds of £156 million (€179 million) once additional costs have been accounted for.
Currys’ shares were last seen 0.8% lower at 65p.
8.14am: Informa shares sent higher
Informa PLC (LSE:INF) shares added nearly 2% in opening trades on the back of a strong annual earnings release.
Statutory profit before tax shot up from £168.8 million in 2022 to £492.2 million in 2023, while strong free cash flow meant total dividends for the year of 18p per share were 84% higher year on year.
Shares in the group were last seen swapping for 822.8p.
The wider blue-chip index was sent lower though, with the FTSE 100 dipping 11 points to 7,682.
Frasers Group PLC (LSE:FRAS) dipped 1.6% after announcing that its online fashion subsidiary Matches was put into administration.
7.58am: Mattioli Woods London’s latest take private
Wealth manager Mattioli Woods is set to leave the London Stock Exchange through a £432 million take-private deal with Pollen Street Capital.
The 804p per share offer represents a 34% premium to Thursday’s 600p closing price and a 41% premium on a volume-weighted basis.
It adds to a wave of take privates in the small and mid-cap end of the sock market by private equity firms snapping up perceivably undervalued businesses.
Recommending the offer, Mattioli’s board said the acquisition “provides an attractive offer for Mattioli Woods shareholders to realise an immediate cash value for their investment whilst also presenting an opportunity to accelerate Mattioli Woods' vision to achieve continued growth across its core pillars of advice, investment and administration”.
It has been a tough twelve months for UK-based fund managers who have been adversely affected recently by a switch by investors away from actively managed funds towards passive investments such as trackers, ETFS and interest-rate focused money market funds.
Figures from sector trade body the Investment Association yesterday showed that £38.1 billion had been withdrawn from active funds over the past year alone.
7.30am: Informa’s divi nearly doubles after rock-solid 2023 earnings
FTSE 100-listed information services provider Informa increased revenues by 30% to £3.2 billion in 2023, with underlying profits of £854 million exceeding the £845 million expected.
Very strong free cash flow meant total dividends for the year of 18p per share were 84% higher year on year, with £550 million returned to shareholders via buybacks.
Informa updated its 2024 guidance, with revenues tipped between £3.45 billion and £3.5 billion, with an adjusted operating profit target of £950 million to £970 million.
“At the heart of our expansion in Open Research is the increasing use of technology and artificial intelligence to drive efficiencies in editorial and production, leading to improving article acceptance rates and reduced processing times,” said the group.
7.17am: Frasers’ Matches goes into administration
Frasers Group subsidiary Matches Fashion has been put into administration mere months after Mike Ashley’s retail business bought the luxury online retailer in December for £52 million.
“Since Frasers Group PLC (LSE:FRAS) acquired MATCHES, the business has consistently missed its business plan targets and, notwithstanding support from the group, has continued to make material losses,” Sports Direct owner Fraser said in a statement.
“Whilst MATCHES' management team has tried to try to find a way to stabilise the business, it has become clear that too much change would be required to restructure it, and the continued funding requirements would be far in excess of amounts that the group considers to be viable.
In light of this, Frasers has been informed that the directors of MATCHES have taken the decision to put the MATCHES group into administration. Frasers remains committed to the luxury market and its brand partners.”
7.11am: Markets to edge higher
FTSE futures point to the blue-chip index adding a handful of points to 7,704 when markets open today after closing 12 points in the green on Thursday.
Informa will shortly have its results out. Some brokers have the FTSE 100-listed specialist information services provider as a winner in a data-driven/artificial intelligence (AI) world.
Today’s results should give a better insight into progress on that front.
There are no UK macroeconomic announcements to look out for, but this afternoon brings US non-farm payrolls and unemployment data.
Onlookers will be looking for a sign of softening in the US employment market in order to make the case for lowering interest rates sooner rather than later.