ADVFN Morning London Market Report: Friday 5 November 2021

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London open: Stocks edge up ahead of payrolls

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London stocks edged higher in early trade on Friday as investors eyed the release of the latest US non-farm payrolls report.

At 0825 GMT, the FTSE 100 was up 0.2% at 7,293.75.

Deutsche Bank said: “In terms of what to expect, our US economists are looking for a 400k increase in non-farm payrolls, which in turn would send the unemployment rate down a tenth to a post-pandemic low of 4.7%.

“The last couple of jobs reports have seen some downside surprises, but if realised, that +400k number would be the strongest jobs growth in three months. We’ve had some fairly positive labour market data in advance of the jobs report too, with the ADP’s report of private payrolls exceeding expectations on Wednesday at 571k (versus 400k expected), and yesterday the weekly initial jobless claims for the week through October 30 fell to a fresh post-pandemic low of 269k (versus 275k expected).

“The Fed made it clear this week that labour market evolution after the delta variant will be a key determinant in the future path of monetary policy.”

The payrolls report, unemployment and average earnings are due at 1230 GMT.

On home shores, figures released earlier by Halifax showed the average UK house price topped £270,000 for the first time in October.

House prices rose 0.9% on the month following a 1.7% increase in September. On the year, prices were 8.1% higher in October, up from 7.4% growth the month before.

The average property now costs a record £270,027, with Wales, Northern Ireland and Scotland continuing to outperform the UK average.

Russell Galley, managing director at Halifax, said: “One of the key drivers of activity in the housing market over the past 18 months has been the race for space, with buyers seeking larger properties, often further from urban centres. Combined with temporary measures such as the cut to Stamp Duty, this has helped push the average property price up to an all-time high of £270,027.”

Earlier this week, Nationwide said that house prices hit £250,311 in October, topping a quarter of a million pounds for the first time.

In equity markets, British Airways owner IAG flew lower despite saying it narrowed third-quarter losses as more people started to travel with the lifting of Covid restrictions. The company posted an operating loss of €452m compared with a loss of €1.92bn last year when passenger travel came to a virtual standstill.

Morgan Advanced Materials rallied after it said full-year organic constant currency growth was set to be around the top end of its previous guidance range of 7% to 9%.

Beazley gained as the insurer reported higher-than-expected gross written premiums, driven by cyber & executive risk and its specialty lines divisions as it set aside $125m in natural disasters claims, including Hurricane Ida and the European floods.

 

Top 10 FTSE 100 Risers

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# Name Change Pct Change Cur Price
1 Bt Group Plc +3.83% +6.05 163.85
2 Hargreaves Lansdown Plc +2.09% +31.00 1,513.50
3 Auto Trader Group Plc +1.67% +10.20 620.00
4 Lloyds Banking Group Plc +1.64% +0.79 49.04
5 Tesco Plc +1.27% +3.50 279.10
6 Barclays Plc +1.19% +2.28 193.78
7 Micro Focus International Plc +1.15% +4.60 404.50
8 Rightmove Plc +1.11% +7.80 710.60
9 Ocado Group Plc +1.10% +19.50 1,792.50
10 Sage Group Plc +1.08% +8.00 747.60

 

Top 10 FTSE 100 Fallers

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# Name Change Pct Change Cur Price
1 International Consolidated Airlines Group S.a. -3.25% -5.52 164.26
2 Easyjet Plc -1.42% -8.80 611.00
3 Rolls-royce Holdings Plc -1.38% -1.86 133.22
4 Compass Group Plc -1.35% -21.00 1,531.00
5 Intercontinental Hotels Group Plc -1.23% -64.00 5,150.00
6 Smith & Nephew Plc -1.13% -15.00 1,310.50
7 Whitbread Plc -1.01% -34.00 3,326.00
8 Evraz Plc -0.92% -5.60 601.40
9 Tui Ag -0.64% -1.50 233.70
10 Kingfisher Plc -0.56% -1.90 340.30

 

Europe open: Shares edge ahead as France’s CAC passes 7,000

European shares edged ahead at the opening on Friday, with France’s CAC 40 the highlight as it breached the 7,000 mark for the first time.

The pan-European Stoxx 600m was up 0.11% in early trade while the French index outperformed with a 0.32% rise. Traders were also eyeing the release of the latest US non-farm payrolls report later Friday.

Investors have taken heart from ECB comments that interest rate rises have been put on hold and the surprise decision by the Bank of England not to raise its lending rate, despite signals to the contrary.

However, concerns about the Chinese property market and debt-laden developers have tempered enthusiasm for equities.

In company news, Polish e-commerce group Allegro gained 5% after the company agreed to buy Czech online retailer Mall Group for €881m to create a regional platform in what would be its first significant international deal.

Shares in British Airways, Aer Lingus and Iberia owner IAG fell as the company warned of a €3bn annual loss.

Shares in Polish grocery chain Dino Polska plunged 7.64% after third quarter net profits came in lower than expectations.

 

US close: Stocks mixed after jobless claims fall

US stocks were in a mixed state at the close on Thursday, as investors mulled the latest initial jobless claims figures.

The Dow Jones Industrial Average was down 0.09% at 36,124.23, while the S&P 500 gained 0.42% to 4,680.06 and the Nasdaq Composite advanced 0.81% to 15,940.31.

Those moves came after Wednesday’s record highs, when the US Federal Reserve said the economy was strong enough for it to start tapering its pandemic bond buying programme.

“In line with our base case, the Fed announced it will reduce the monthly QE buying pace by $15bn per month starting from mid-November,” said Danske Bank.

“This means that QE is concluded in June.”

Danske did note that the Fed introduced some flexibility by saying the tapering pace could be adjusted if needed.

“We think the balance of risk is tilted towards a higher tapering pace, although it is not our base case.”

On the corporate front, Regeneron lost 0.69%, Kellogg was down 0.68%, Uber slipped 0.98% and Square was off 1.99%, while Qualcomm surged 12.73% as the earnings reports kept rolling ashore.

In macroeconomic news, the latest data from the Labor Department showed initial jobless claims fell by 14,000 to 269,000 in the week ended 30 October, hitting their lowest level since 14 March 2020.

Analysts had been expecting a figure of 275,000.

Investors were also waiting on the monthly non-farm payrolls report due out the next day.

 

Friday newspaper round-up: Liberty Steel, London house prices, Covid support schemes

The metals tycoon Sanjeev Gupta should be investigated for potential breaches of his duties as a company director, according to a scathing report by MPs that said his leadership threatened the future viability of Liberty Steel. Liberty Steel has lurched through eight months of crisis after the March collapse of its key financial backer, Greensill Capital, triggered an ongoing attempt to find new lenders. – Guardian

The return of the international super-rich to London amid the easing of coronavirus pandemic restrictions has fuelled the highest annual growth in property prices in the capital’s most expensive district since 2015. Average home prices in “prime central London” – which stretches from Chelsea to Camden and Notting Hill to Westminster – have risen by almost 7% since the start of the year, according to research by the estate agent Knight Frank. – Guardian

One of Virgin Media O2’s owners has stoked City expectations of a blockbuster float of the £31bn mobile and broadband giant as soon as next year. Mike Fries, chief executive of Liberty Global, said he was mulling listings for some of its European telecoms operators, fuelling speculation that a listing of the cable and mobile company could be brought forward to 2022. – Telegraph

Fraudulent claims on three emergency government schemes may have cost the taxpayer almost £5 billion, according to an analysis of figures published by HM Revenue & Customs. The tax authority has estimated in its annual report that up to 6.4 per cent of the billions of pounds provided to companies supposed to be supporting furloughed employees may have been lost to fraudsters — meaning as much as £4.42 billion may have been paid to criminals abusing the scheme.- The Times

A shortage of candidates is hitting firms’ recruitment plans and starting salaries for full-time and temporary staff have hit record levels, according to a report. Hiring has continued in recent weeks, although the availability of candidates fell sharply, a survey by the Recruitment and Employment Confederation (REC) and KPMG suggested. – The Times

 

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