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(Alliance News) - Blue-chip stock prices in Europe nudged higher on Thursday, with focus now firmly on Friday's US jobs report, which will provide a key reading on the health of the world's largest economy and help dictate the next steps by the Federal Reserve.
London's FTSE 100 recovered from a slow start and ended around session highs, with a strong start to the day for New York equities boosting sentiment. The FTSE 250 meanwhile, finally relented after three successive record closes, as share price declines for CMC Markets and IG Group weighed on the index.
The FTSE 100 index ended up 14.06 points, or 0.2%, at 7,163.90. The mid-cap FTSE 250 index closed down 24.56 points, or 0.1%, at 24,226.27. The AIM All-Share index rose 3.30 points, or 0.3%, to 1,307.67, climbing further above the 1,300 points mark, a threshold it crossed for the first time in 20 years on Wednesday.
The Cboe UK 100 index ended up 0.2% at 712.61. The Cboe 250 ended down 0.1% at 22,015.13, and the Cboe Small Companies rose 0.1% to 15,585.46.
In mainland Europe, the CAC 40 stock index in Paris and the DAX 30 in Frankfurt both closed up 0.1%.
In New York, the Dow Jones Industrial Average was up 0.4% at the time of the European equities close. The S&P 500 and Nasdaq Composite were also 0.4% higher.
"Last week, the countdown to Friday was for a speech by Fed Chair Jerome Powell. This week, the clock is ticking on an August jobs report that might help shape Fed policy and investors' perceptions of the economy. Powell's speech last Friday appeared to get a bullish response from the market despite his hints that the Fed could get more hawkish if the economy meets certain parameters," TD Ameritrade analyst JJ Kinahan commented.
"Tomorrow's report, one that analysts expect will show 750,000 new jobs created, according to Briefing.com, could provide more ammunition for Fed hawks if it shows unemployment continuing to fall and wages continuing to rise."
Ahead of the release, data showed US initial jobless claims fell to a fresh post-pandemic low.
For the week ended August 28, the number of US workers filing for unemployment benefits fell to 340,000 from 354,000 in the week prior. The latest figure was below market consensus, cited by FXStreet, of 345,000 and was also the lowest since March 2020.
Pantheon Macroeconomics analyst Ian Shepherdson said the "problem is with the pace of hiring, not firing," suggesting investors should not expect a fall in jobless claims to signal a marked boost in employment numbers.
"A continued downward trend in claims, therefore, is no guarantee that payroll growth is still building momentum; we expect tomorrow's August data to show the opposite, with a clear slowing in private job growth," Shepherdson added.
The latest US nonfarm payrolls report is due at 1330 BST on Friday. Ahead of the data, a host of services and composite purchasing managers' index readings are printed, including the eurozone at 0900 BST, the UK at 0930 BST and the US at 1445 BST.
The pound was quoted at USD1.3836 late Thursday, up from USD1.3786 at the London equities close Wednesday. The euro was priced at USD1.1862, up from USD1.1858. Against the yen, the dollar was trading at JPY109.98, down from JPY110.04.
Brent oil was quoted at USD73.34 a barrel at the London equities close on Thursday, up sharply from USD70.76 late Wednesday. Gold was trading at USD1,812.03 an ounce, down a touch from USD1,812.84.
In London, BHP fell 5.5%. The miner was among a handful of stocks to go ex-dividend, meaning new buyers do not qualify for the latest payout.
Copper producer Antofagasta lost 0.2% and insurer Admiral gave back 4.2%. The duo also went ex-dividend on Thursday.
Melrose Industries was the best blue-chip performer, meanwhile, adding 6.4%. The industrial turnaround specialist said it was trading ahead of expectations and sees scope to return more cash to shareholders next year.
For the six months to June 30, revenue rose to GBP3.54 billion from GBP3.39 billion last year and its pretax loss narrowed to GBP256 million from GBP720 million.
Melrose declared an interim dividend of 0.75p per share, having skipped its payout last year. It did recently, however, unveil a GBP730 million return to shareholders after completing the sale of its Nortek Air Management division.
Hargreaves Lansdown analyst Laura Hoy commented: "Melrose has been working to get its balance sheet in check, with a series of disposals, cost saving efforts and a massive reduction in pension obligations. That's opened the door for rising shareholder returns, and we were encouraged to see the group upping its capital returns by 15p this year. If all goes to plan, there should be more where that came from."
CMC Markets plunged 27%, the worst mid-cap performer. The contract-for-difference provider said it entered the financial year with "significant momentum" but cautioned it has seen market activity slow during a subdued summer period, with client income retention "tracking moderately below" its target.
CMC now expects financial 2022 net operating income to settle in a range between GBP250 million to GBP280 million. CMC posted net operating income of GBP409.8 million for the financial year ended March 31.
CMC also highlighted that year to date, client income retention has been tracking moderately below its targeted 80% level. The company, however, expects this to recover through the remaining seven months of the year based on a reversion towards historical averages in the mix of asset class trading.
IG Group shares tumbled 11% and Plus500 fell 3.8%, in a negative read-across.
Elsewhere in London, Gym Group rose 8.1% after a surge in membership numbers.
The low-cost gym operator's revenue fell 21% year-on-year to GBP29.3 million from GBP37.3 million, though its pretax loss narrowed a touch to GBP28.5 million from GBP28.6 million.
However, membership numbers at the end of June rose to 730,000 from 547,000 at the end of February.
Edison Group analyst Richard Finch commented: "In H1 2021, the proportion of members taking up the company's premium LIVE IT membership was 24.7%, an increase from 22.5% in H2 2020 and a further sign of the beginnings of recovery."
Friday's local corporate calendar has annual results from emerging markets-focused asset manager Ashmore Group. PVC window, door, conservatory and roofline products manufacturer Eurocell posts interim results.
By Eric Cunha; ericcunha@alliancenews.com
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