FTSE 100, 250 end higher
Pound flat at $1.2157 as the dollar gained momentum ahead of an expected rise in US interest rates next week
Sterling falls 1% against euro to 1.3399
FTSE 100 stocks ended higher on Friday, led by telecoms behemoth BT (LON:BT.A) after confirming it would separate Openreach.
The market also benefit from the upside on Wall Street after US non-farm payrolls growth exceeded expectations and showed a forming labour market would now certainly lead to a Federal Reserve rate hike on March 15.
The blue-chip index gained 0.4% to close at 7,343.
Shares in the telecoms giant jumped 3.7% to 342.45p, putting it at the top of the FTSE 100 leaders board.
On the FTSE 250, which ended up 0.4% at 18,961, insurer Esure (LON:ESUR) jumped 7.9% to 240p after hitting a record high of 245p, after reporting an 18% rise in annual pre-tax profit to £80.5mln.
1530 GMT - FTSE 100 strong, near session highs as New York gains after jobs data
FTSE 100 up around 47 points
US blue chips higher after US payrolls beat forecasts
BP leads oils on Exxon bid chatter, crude price recovery
Gold miners weak as metal price falls, Goldman downgrades
BT boosted by Openreach deal with Ofcom
3.30pm …Good gains …
The FTSE 100 held near session highs in late afternoon trading, on track to snap a seven-session losing streak, as US stocks posted early gains following a stronger than expected US February payrolls report.
Approaching 3.30pm, the UK blue chip index was around 47 points higher at 7,361, just easing back from the day’s peak of 7,373.
After an hour of trading on Wall Street, the Dow Jones Industrial had gained around 65 points at 20,924 as the above-forecast jobs data heightened expectations that the Federal Reserve will raise US interest rates at its meeting next week.
The US saw 235,000 non-farm payrolls added last month, exceeding the 221,000 consensus estimate.
David Lamb, head of dealing at FEXCO Corporate Payments, said: “A rate hike next week remains a formality after this stronger than expected print.
“The February number is solid rather than supersonic but that in itself could imply more sustainable growth in the world’s biggest economy.
“Factor in this week’s flamboyant ADP employment report, the strongest in three years, and the markets are looking at a rate hike as a done deal.”
The main boost in London continued to come from strength in the energy stocks as crude prices rallied following sharp falls in the past few sessions.
BP PLC (LON:BP.) stood out, adding 3.4% at 469.3p, also boosted by a revival of speculation that US oil giant Exxon Mobil Corp (NYSE:XOM) could be considering up to a £120mln takeover move for the UK firm – Exxon shares were 0.5% lower in New York.
Bid talk has stalked BP ever since the Deepwater Horizon rig disaster in the US Gulf of Mexico smashed its share price and led to billions of pounds worth of charges and litigation costs.
2.00pm … Jobs boost …
The Footsie jumped to its session peak in early afternoon trading in the aftermath of the release of stronger than expected US February jobs data, which heightened expectations that the Federal Reserve will raise US interest rates at its meeting next week.
Around 2.00pm, the FTSE 100 index was about 53 points higher at 7,368, having been up around 30 points before the US data.
US stock index futures also extended their gains in the wake of the data, which saw 235,000 non-farm payrolls added in the first full month of Donald Trump’s presidency.
The increase in hiring exceeded the 221,000 consensus estimate and means the US economy has added almost half a million jobs in the first two months of 2017.
The US unemployment rate slipped to 4.7%, down from 4.8%, in January, however, average hourly wages rose by just 0.2%, undershooting expectations for the second month in a row.
Naeem Aslam, chief market analyst at ThinkMarkets UK Ltd, said: “The data has rubber stamped the view that the job market is tight and it is becoming even more tighter. I think on the back of this report we may actually hear something from Trump who likes to take credit of all good things."
He added: “The wage number released today was not really a blowout number but still a very decent one. Only if the number was extremely vile, then the Fed was going to stop their interest rate hike, but now it looks like that we are going to see a rate hike next week.”
Expectations for an imminent US rate hike weighed on gold prices, with the yellow metal losing 0.5% to US$1,196 an ounce.
12.15pm … No US jobs worry …
The FTSE 100 stayed strong in lunchtime trading bolstered by gains in commodity stocks as oil and base metal prices rallied today, with investors failing to show any fear ahead of the always volatile US payrolls data due this afternoon.
Around 12.15pm, the UK blue chip index was up about 32 points at 7,347, stuck in a tight trading range of 7,314 to 7,352, but on course to snap a seven-session losing streak.
Much though, is likely to depend on the US jobs report, due at 1.30pm London time.
David Morrison, senior market strategist at SpreadCo., said: “Analysts now expect payrolls to rise by around 200,000. This is up from the 185,000 consensus from earlier in the week thanks to a very strong ADP number on Wednesday.
“In fact, it’s quite possible that today’s release ends up being one of those upside blow-out numbers that occasionally crop up from nowhere. Consequently, there are few worries that it will throw off the Fed from hiking rates at next week’s meeting.
“In fact, the debate has now moved on to ponder whether the US central bank could be gearing up for a total of four 25-basis point hikes in 2017.”
Although strength in most commodity stocks provided a prop for the blue chip gains in London, precious metal miners missed out.
Randgold Resources PLC (LON:RRS) and Fresnillo PLC (LON:FRES) respectively shed 1.5% at 6,830p and 1.8% at 1,330p as gold prices retreated and Goldman Sachs downgraded its rating for both – Randgold to ‘neutral’ from ‘buy’ and Fresnillo to ‘sell’ from ‘neutral’.
On the second line, engineering contractor Amec Foster Wheeler PLC (LON:AMFW) saw good gains, adding 3.6% at 486.8p on news of two separate contract wins – one with Brunei Shell Petroleum, and another with Kuwait Petroleum Co's subsidiary Petrochemical Industries Co.
Merged impaired annuities provider JRP Group Plc (LON:JRP) was also in demand, adding 4.4% at 156.7p after it posted strong 2016 profits, driven by the large lift in revenue and a significant reduction in costs from last April’s tie-up.
But warehouse property investor SEGRO PLC (LON:SGO) was a faller, losing 4.4% at 474.8p as it launched a 1 for 5 rights issue, to raise £573mln to partly fund the cash element of a deal to take full control of the Airport Property Partnership by buying the 50% stake in the venture from its partner Aviva Life & Pensions UK for £365mln.
Among the small caps, inhaler group Synairgen plc (LON:SNG) jumped 11% higher to 27.25p after revealing good pre-clinical data from a new programme investigating lung fibrosis.
But UK-focused oil minnow Angus Energy Plc (LON:ANGS) fell 4.4% to 10.875p even though it denied suggestions that its work programme at Brockham in Surrey was ‘unauthorised’.
10.15am … Oils, BT boost …
The Footsie held firm in mid morning trading, supported by a recovery in heavyweight oil majors in tandem with a rally from lows by crude prices, and strength in telecoms giant BT Group PLC (LON:BT.A) after it reached a deal on its Openreach unit with regulator Ofcom.
Around 10.15am, the FTSE 100 index was up around 31 points at 7,346, just below the early session peak of 7,352.
There was little reaction to today’s UK data, which showed that industrial production decreased for the first time in three months in January, falling 0.4% according to the Office for National Statistics.
That bad news was balanced by a Bank of England quarterly survey showing that consumer inflation expectations only edged higher in February.
Howard Archer, chief UK and European economist at IHS Markit said BoE policymakers “will particularly note that longer-term inflation expectations remain pretty well anchored.”
He added: “This eases pressure for now at least for an early hike of interest rates.”
On currency markets, sterling remained mixed, weaker versus the euro at €1.2175, but lower against the dollar at US$1.2175 as investors more importantly awaited the February US jobs report, due this afternoon, always a key pointer especially ahead of next week’s Federal Reserve policy meeting.
Among equities, Shelia’s Wheels insurer esure Group PLC (LON:ESUR) was the top FTSE 250 gainer, up 7.8% to 239.8p after the firm reported solid growth in premiums and profits in 2016, with its strong capital position allowing the payment of a bigger than expected special dividend.
Electronic technology group Laird PLC was also a strong mid cap riser, adding nearly 7% at 178p after German broker Berenberg double-upgraded its rating to ‘buy’ from ‘sell’ with a new target price of 240p, up from 130p.
But the same broker blighted logistics group Northgate PLC (LON:NTG), which topped the FTSE 250 fallers, down 4.5% at 529.5p as Berenberg chopped its stance to ‘hold’ from ‘sell’.
Aldermore Group PLC (LON:ALD) saw its shares drop nearly 7% at 223.7p after private equity firm AnaCap Financial Partners completed a placing of around a 15% stake in the Challenger bank at a price of 220p a share.
8.45am ... Opening lift ...
The FTSE 100 made a positive start to proceedings as the index of blue-chip shares advanced 32 points to 7,346.71, taking its cue from Asia’s stock markets.
BT Group PLC (LON:BT.A) was the major riser after it called it quits on its spat with the regulator Ofcom by agreeing to make its Openreach infrastructure monopoly autonomous. The shares surged 5% early on.
The natural resources shares were in demand early on with Royal Dutch Shell (LON:RDSA) up 1% the day after its deal to offload its oil sands assets.
BP (LON:BP. wasn’t far behind, while the integrated miners bounced back after the recent, China-inspired sell-off with Glencore (LON:GLEN) leading the pack.
Counter-balancing this was the performance of the precious metals specialist as the gold price nudged below the US$1,200 an ounce level for the first time since late December.
Silver-focused Fresnillo (LON:FRES) was down 3.3%, leading the list of losers, while Randgold Resoures (LON:RRS) fell 2.2%.
Moving down to the FTSE 250, insurer esure Group’s (LON:ESUR) prelims passed muster with investors as the shares rose 8%.
Proactive news headlines
Sound Energy PLC (LON:SOU) said its latest well on the Tendrara licence in Morocco has reached the final casing point.
TE-8’s liner is being cemented at a depth of 2,603 metres and is just two metres from the main reservoir in the TAGI formation. The well will be drilled to a vertical depth of 2,977 metres. Shares rose 4% to 90p.
Highlands Natural Resources Plc (LON:HNR) has told investors that its arrangement with Renegade Oil & Gas Company LLC has been redrawn, and it sees HNR significantly enhance its land position in the Niobrara shale play in East Denver, Colorado.
The revised deal also gives HNR more operational flexibility, allowing the engineering team to save up to US$500,000 for every well it drills.
Shares in Asiamet Resources Limited (LON:ARS, CVE:ARS) were 3% higher at 4.32p on the back of some encouraging drilling results.
Resource infill and extension drilling being completed as part of feasibility studies on the Beruang Kanan Main (BKM) copper deposit in Central Kalimantan, Indonesia continues to substantially de-risk the resource that underpins the project.
ImmuPharma PLC (LON:IMM) has announced plans to raise a minimum £3mln from investors with the new cash infusion used to strengthen its balance sheet as negotiations take place with potential commercial partners for its flagship drug, Lupuzor.
The life sciences group has launched an accelerated book-build offering stock at 52p, a modest discount to last night’s closing price. Shares fell 6% to 54.1p.
Niche lender Private & Commercial Finance Group plc (LON:PCF) has kept its eye on the ball, even as it moves towards setting up its banking arm.
The group's primary objective is to complete full mobilisation of the bank and the project is on track for delivery this summer, chief executive officer Scott Maybury revealed in a statement released ahead of today's annual general meeting.
Clinigen Group PLC (LON:CLIN) and Eisai, its partner in South Africa, have received approval for perampanel, a treatment for seizures associated with epilepsy.
The drug is the first anti-epileptic drug to be approved in South Africa for some time and will be the second that Clinigen has started to distribute through its partnership with Japanese company Eisai.
6.45am ... Positive start predicted ...
UK stocks look set to end the week on a firm note, clawing back all of yesterday's losses.
Spread betting quotes point to the FTSE 100 opening at around 7,337, compared to last night's close of 7,315.
That's despite a wishy-washy showing on US markets yesterday, where the S&P 500 crawled up a couple of points to 2,365 and the Dow also rose a couple of points, to 20,858.
Investors may well have been sitting on their hands ahead of today's jobs numbers for February. The expectation is that non-farm payrolls will have risen around 200k, having risen 237k in January.
The US unemployment rate is tipped to ease to 4.7% from 4.8% the previous month.
Heading towards the close Asian markets were going well. In Tokyo, the Nikkei 225 was up 286 points at 19,605 while in Hong Kong the Hang Seng was 44 points to the good at 23,545.
Turning to company results, esure Group is the last of the quoted car insurers to report this week.
Analysts are looking for pre-tax profit of £66.29mln on revenue of £641.8mln.
Of more interest, perhaps, will be the company's comments on the changes to the Ogden discount rate used by courts to calculate damage awards.
The changes have knocked the sector for six and have already prompted esure's competitors to take a gloomier view of prospects.
If esure is justified in having a moan it will likely be as nothing compared to the epic rant that is usually contained within the results statement from pubs operator JD Wetherspoon PLC (LON:JDW).
With the Budget statement still fresh in the memory, expect chairman and founder Tim Martin to have his traditional moan at what he sees as the unequal tax treatment dished out to pubs compared to supermarkets.
Profit before tax is expected to be £76mln on flat sales of £1.6bn.
Significant results expected
Finals: esure Group PLC (LON:ESUR)
Interims: JRP Group Plc (LON:JRP), JD Wetherspoon PLC (LON:JDW)
Around the markets
- Sterling: US$1.2159, down 0.04 cents
- 10-year gilt yield: 1.227%
- Gold: US$1,197.70 an ounce, down US$5.50
- Brent crude: US$52.56 a barrel, up 37 cents
Headlines
- No pay rise for 15 years, IFS warns UK workers – The Guardian
- Sir Martin Sorrell’s £42 million payout takes earnings to £210 million in five years – The Guardian
- Barclays just handed its exec team £13.6 million worth of shares in the bank, and there’s the chance they could snap up £9.2 million more – City AM
- Hostile bid for Akzo Nobel puts UK jobs under threat – The Times
- Osborne tax change helped 100 wealthy people save £1 million each says OBR – The Independent
- Pret A Manger is facing a Brexit staffing crisis – The Independent
- Peter Hancock to throw in towel as AIG chief after recovery plan flounders – The Financial Times
- Rolls-Royce's chief engineer quits – Financial Times
- Twice the number of self-driving cars on the road in California – Financial Times