FTSE 100 closes at 7,438
Indivior shares plummet
US non-farm payrolls increased by 156,000 (vs expectations for 180,000)
FTSE 100 closed in positive territory despite disappointing jobs data from across the pond, but the mid-tier FTSE 250 closed lower.
FTSE 100 finished the day at 7,438, up almost eight points, while FTSE 250 lagged over 17 points down, at 19,786, weighed on by Indivior, the specialty pharma group, which shed 38%.
The group lost its US court battle to protect its heroin replacement, Suboxone, from a cheap, copycat competition.
“Indivior says it’s hard to gauge the financial impact but its dominant market position could collapse in a matter of months. It’s a big blow,” noted ETX Capital’s Neil Wilson.
Meanwhile, the closely watched US non-farm payrolls showed 156,000 jobs were added in August.
Economists had expected 180,000, and the July figure was revised down to 189,000 from 209,000. The unemployment rate ticked up to 4.4% from 4.3%, and the consensus was for it to remain at 4.3%.
On FTSE 100, the biggest gainer was Ashtead Group (LON:AHT), gaining 2.53% to 1,705p, while big miners also gained ground.
Micro Focus International (LON:MCRO) shed 0.35% to 2,273p and was the top loser.
1530pm
London’s FTSE 100 is set to end the week on a positive note, with the benchmark up around 16 points or 0.22% at 7,447 ahead of Friday’s close.
It comes as US investors shrugged off a lower-than-expected rise in non-farm payroll figures showing that fewer new jobs were created than the market had expected (156,000 vs 180,000), meanwhile the unemployment rate was slightly higher than expected at 4.4% (vs 4.3%).
Whilst the employment numbers were below expectations, nothing has really changed – not according to EXT Capital analyst Neil Wilson.
“Although a miss it looks like this print isn’t doing anything to alter projections for what the Federal Reserve will do later this month or for the rest of the year.
“The labour market remains in fine health, wage growth is AWOL and inflation lacklustre – nothing has changed today.
“One swallow doesn’t make a summer and one August jobs miss doesn’t make for a weakening labour market.
“Markets have already decided the Fed probably won’t hike again this year.”
On Wall Street, the Dow Jones rose 0.26% to trade at 22,006 while the S&P 500 was up 0.18% to 2,476 and the Nasdaq was only marginally higher at 6,432.
14:05: FTSE 100 keeps positive ground despite lower-than-expected US jobs data
The US economy didn’t create as many jobs as expected in August, according to non-farm payroll statistics which increased by 156,000 jobs rather than the expected 180,000.
Meanwhile, the American unemployment rate moved to 4.4% which is slightly better than the consensus expectation of 4.3%.
“Despite the chaotic nature of the Trump administration, recent data has indicated that the US economy is in rude health,” said Dennis de Jong, managing director at trading firm UFX.
“Economic growth, although still well below the president’s four percent target, hit three percent in Q2, the fastest rise in two years. But August’s non-farm payroll reading wasn’t quite what Trump was looking for.”
Craig Erlam, analyst at OANDA, meanwhile, said: “If Federal Reserve policy makers were already starting to question the need for another rate hike this year – and the pace thereafter – then this week’s data won’t have made them feel any more comfortable.”
“Thursday’s weak inflation data – continuing this year’s trend of cooling price pressures – was today made all the worse by a poor August jobs report across the board with unemployment rising, job creation falling well short of expectations and earnings showing no improvement.
“Anyone hoping for a signal this month that the Fed is on track for another rate hike this year may well be disappointed.”
Nevertheless, US equities are still looking like they’ll start Friday’s session in positive territory.
In London, the FTSE 100 was 11 points or 0.16% higher changing hands at 7,442 at around 14:00.
12:27 - FTSE 100 edging higher, Wall Street indicated higher in pre-market
The FTSE 100 was edging higher at midday, lifted somewhat by some early positivity in New York.
London’s blue-chip benchmark had gained 23 points, 0.3%, trading at 7,453.
In premarket dealing Wall Street indicators point to a positive start for New York benchmarks, with the Dow Jones seen rising a little more than 50 points, meanwhile, the S&P 500 and Nasdaq are also both in positive territory.
West coast stocks Lululemon Athletica and Ambarella Inc, which both released quarterly financials after Thursday’s close, were seen going in different directions in Friday’s deals.
The yoga clothing group climbed 5.8% to US$60.89, while California based compression software firm Ambarella shed nearly 10%.
11:18am - Indivior languishes, FTSE 100 treads water ahead of US jobs report
Drugs maker Indivior PLC (LON:INDV) was Friday’s standout loser with more than £1bn was wiped from its the value, falling almost 40% to 260p, as appears to be losing the legal battle to protect its best-selling product from copycat competition.
The FTSE 100 was, meanwhile, treading water – up about 15 points changing hands at 7,445 - ahead of US employment statistics later today.
Elsewhere, Greene King Plc (LON:GNK) shares were struggling on Friday morning, down 4.8% to 656p, as HSBC downgraded the UK pub group to ‘reduce’ from ‘hold’ and set a target of 595p.
In a sector review, the bank’s analysts also move J D Wetherspoon Plc (LON:JDW) down to ‘hold’ from ‘buy’.
Cinema owner Everyman Media Group Plc (LON:EMAN) got a boost from interim results, with shares rising 4%, after showing a 55% improvement in revenue to £18.8mln and earnings (adjusted EBITDA) were up 123% to £3mln.
10:16am - FTSE 100 holds early gains, traders await US jobs report
London’s FTSE 100 held onto the morning’s opening gains, up about 15 points at 7,445, though as it is the first Friday of the month most traders are looking to the United States for the non-farm employment stats.
It is usually a quiet few hours of fence sitting for all but the boldest traders. The monthly report is seen as something of a bellwether for sentiment at the Federal Reserve, albeit today’s stats will exclude impacts associated with Hurricane Harvey and the flooding crisis in Houston .
Looking ahead to the stats, CMC Markets analyst David Madden in a note said: “When it comes to the US jobs report, the devil is in the detail, and we would need to see all aspects of the announcement being robust before the Federal Reserve could look to tighten their monetary policy.
“I pay close attention to the earnings figure as job creation is all well and good, but salaries need to be strong so Americans go out and spend money.”
8:48am - FTSE 100 makes positive start, but Indivior takes pummelling
The FTSE 100 opened the day in positive territory with all eyes trained Stateside, where the non-farm payrolls later should shape sentiment on both sides of the Atlantic.
The index of blue-chip shares was up 10 points at 7,440.71 with the miners still in reasonable demand – although movements on the Footsie (both up and down) were a tad muted.
The roller coaster action was on the FTSE 250, where Indivior (LON:INDV) dived 40% after it lost a US court battle to protect its heroin replacement, Suboxone, from cheap, copycat competition.
“Indivior says it’s hard to gauge the financial impact but its dominant market position could collapse in a matter of months. It’s a big blow,” said ETX Capital’s Neil Wilson.
Proactive News Headlines:
ITM Power plc (LON:ITM) is to launch the first emission free hydrogen bus route in France through a consortium with SMT-PPP, Engie and Van Hool. The GNVERT -Van Hool consortium has signed a contract to deliver the eco-friendly bus route between the hospital and railway station in the southwestern French city of Pau within two years.
eg solutions PLC (LON:EGS), a specialist in back-office optimisation, has signed a five-year contract worth a minimum of £8.12mln, including £1.4mln of incremental revenue. The unnamed customer is described as a leading provider of business process management.
Advanced materials specialist Haydale Graphene Industries PLC (LON:HAYD) said its US sUBSidiary has landed a US$4.58mln, three-year contract with Tateho Chemical Industries Co of Japan.
Techfinancials PLC (LON:TECH) expects the online trading software business to remain challenging over the remainder of 2017 due to the number of regulatory reviews underway across the industry. Marketing of binary options, Forex and CFD trading is under close scrutiny in a number of countries, which is making for a very uncertain environment for platform developers such as Techfinancials.
Cancer treatment pioneer Nanobiotix (EPA:NANO) made good progress in the first half of 2017, Philippe MaUberna, chief financial officer said today. The Paris-based company is developing the use of a combination of nanoparticles/radiotherapy to treat a range of cancers.
Horizon Discovery Group PLC (LON:HZD) has completed the acquisition of GE healthcare business Dharmacon. The US$85mln deal was announced in July and funded through cash and shares and an accompanying £80mln placing.
Eland Oil & Gas PLC (LON:ELA) marked a new milestone at the Opuama field, which produced 1mln barrels in the past three months, and told investors that a rig has now been mobilised for an upcoming programme. The Nigeria-focussed oiler is planning to drill a side-track from the Opuama-7 well, with work due to get underway in mid-September. Production from the well is expected to follow in October.
Savannah Petroleum PLC (LON:SAVP) told investors it is still working on the proposed reverse takeover of Seven Energy International’s Nigeria assets. The company’s shares remain suspended until either the deal proceeds or the discussions cease, it noted.
China Nonferrous Gold Limited (LON:CNG) announced that it has appointed Yu Lixian as its new managing director and Hao Zhang as finance director with immediate effect. Yu is also senior engineer for the company’s largest shareholder, China Nonferrous Metals Int’l Mining Co (CNMIM), while Zhang is CNMIM’s chief accountant.
Keywords Studios PC (LON:KWS), the international technical services provider to the global video games industry, has announced the appointments of Georges Fornay and Charlotta Ginman as non-executive directors with effect from 1 September 2017.
ReNeuron Group Plc (LON:RENE), the UK-based global leader in the development of cell-based therapeutics, has announced the appointment of Dr Claudia D'Augusta as a non-executive director with effect from the date of the company's Annual General Meeting on 6 September 2017. She will also chair the Company's Audit Committee.
Braveheart Investment Group PLC (LON:BRH), the fund management and strategic investor group, has announced that Andrew Burton, an executive director of the group and managing director of Viking Fund Managers Limited today retired from the company’s board.
European Wealth Group Limited (LON:EWG) (LON:EWGL), the integrated wealth management group, said it has been informed that its former group CEO, Rod Gentry – is currently beneficially interested in a total of 4,137,750 ordinary shares, representing 4.16% of the company.
6.45am: Flat start predicted
The FTSE 100 is seen opening flat today, pausing after strong gains on Thursday and advances overnight on Wall Street and in Asia, with all eyes on the latest US jobs data, and the Labor Day long holiday weekend in the US.
Spread betting firm CMC Markets expects the FTSE 100 index to open unchanged at 7,430, having gained 65 points yesterday.
New York stocks pushed higher yesterday, with the Dow Jones Industrials adding over 55 points at 21,948 buoyed by some weaker than expected US inflation data, with Asian markets modestly continuing that trend today.
Hardly any corporate news is scheduled for release, so all the attention will on be the latest US labor market report, due as always on the first Friday of the new month.
Michael Hewson chief market analyst at CMC Markets UK said: “A decent payrolls number today would be the icing on the cake in a week that has seen some positive signs that the US economy may be in better shape than was previously thought prior to Jackson Hole.
“Today’s US employment report is expected to see 180k jobs added in August, down from July’s 209k, however this week’s bumper ADP report has seen some estimates for today revised higher.”
He added: “Of more importance will be how strong the wages numbers come in, given an unemployment rate of 4.3%. Annual hourly wage growth is currently 2.5%, a little on the weak side for an economy supposedly at full employment so a strong number here could increase the odds of another rate rise this year, most likely in December.”
Before the US jobs numbers, a host of manufacturing PMI numbers from across Japan and China, as well as Europe and the UK will also be released.
China’s private Caixin manufacturing purchasing managers index showed the country’s August manufacturing activity expanded at the fastest pace in six months.
Significant events expected on Friday September 1:
Interims: EMIS Group PLC (LON:EMIS)
AGM: Anglesey Mining PLC (LON:AYM)
Economic data: US non-farm payrolls, jobless rate, average weekly earnings; US construction spending; US ISM manufacturing report; University of Michigan final consumer confidence report
Around the markets:
- Sterling: US$1.2914, down 0.1%
- Gold: US$1,319.40 an ounce, up 0.2%
- Brent crude: US$46.94 a barrel, down 0.6%
City Headlines:
- Petrofac Boss made €300,000 ‘on tip-off’ – The Times
- Apple sets September 12 date for next iPhone launch – Financial Times
- Vodafone to launch Voxi mobile youth brand in UK – Financial Times
- Ryanair Chief: May should be doing Brexit deal, not drinking sake – The Guardian
- SSE revealed as most profit-hungry of Big Six as margins climb for a third year – Daily Telegraph
- Eddie Stobart looks to grab bigger slice of online retail market – Daily Telegraph
- Menzies drives off with green delivery firm Gnewt Cargo – The Scotsman
- Rathbones abandons its plans for £2bn tie-up with rival wealth manager Smith & Williamson – Daily Mail
- Amazon hit by lawsuit from couple over solar eclipse glasses – The Independent
- Hellman & Friedman leads race for $5bn Nets deal – Financial Times
- Tenet Healthcare announces CEO exit, board ‘refresh’ - Financial Times
- Six big banks to create a blockchain-based cash system led by UBS – The Independent
- New Uber Boss’s first task is to reconcile deeply divided board – Financial Times
- Bill Gates knocked off top of Forbes rich list by Spanish retailer – The independent
- Elliott seeks premium to back takeover of Stada – Financial Times
- Samsung plans to test self-driving cars in California – Financial Times
- Galeries Lafayette and La Redoute merge into modern era – The Times
- Slater & Gordon law firm splits from parent – The Times
- Former Morrisons Boss Dalton Philips returns home as Boss of Irish airport business – Daily Telegraph
- John Lewis rolls out scheme to take the hassle out of finding a tradesperson – The Guardian
- VW launches new UK diesel scrappage scheme – BBC News
- Toyota announces a scrappage scheme for the UK - CityAM