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LONDON MARKET CLOSE: Dismal US Job Growth Adds To Growth Concerns

Fri, 08th Mar 2019 17:16

LONDON (Alliance News) - Stocks in London ended lower on Friday after disappointing US nonfarm payrolls numbers added to the gloomy picture over the health of the global economy.Financial markets across the globe took a hit on Thursday after the European Central Bank slashed its growth forecasts and after comments from President Mario Draghi saying the European economy was in "a period of continued weakness and pervasive uncertainty".The FTSE 100 index closed down 0.7%, or 53.24 points at 7,104.31 ending the week flat.The FTSE 250 ended 0.7% lower, or 136.15 points, at 19,047.67, ending the week down 1.6%, and the AIM All-Share closed down 0.6%, or 5.18 points, at 904.68, ending the week down 1.2%.The Cboe UK 100 ended down 0.5% at 12,077.02, the Cboe UK 250 closed down down 0.6% at 17,045.80, and the Cboe Small Companies ended 0.3% lower at 11,083.48.In Paris the CAC 40 ended down 0.7%, while the DAX 30 in Frankfurt ended down 0.5%. "Equity markets ended firmly in the red as traders are concerned about the state of the global economy. The week finished on a negative note as a mixture of underwhelming Chinese trade figures and a dreadful headline US non-farm payrolls number weighed on sentiment," said CMC Markets analyst David Madden. Stocks in New York were lower at the London equities close after a report from the US Labor Department revealed job growth nearly ground to a halt in February after surging in January.The DJIA was down 0.6%, the S&P 500 index down 0.7% and the Nasdaq Composite down 0.8%.The Labor Department said non-farm payroll employment edged up by 20,000 jobs in February after jumping by an upwardly revised 311,000 jobs in January. Economists had expected employment to increase by about 180,000 jobs compared to the spike of 304,000 jobs originally reported for the previous month.The much weaker than expected job growth in February represented the worst month since the loss of 18,000 jobs in September of 2017, when employment was hurt by Hurricanes Harvey and Irma."Although the US has been in good economic shape for some there have been some small signs of weakness in recent data. Employment data is a lagging indicator but latest jobs data may be caused by one-off factors and investors should wait for further information to see if a trend develops. It does add to growing signs of a slowdown in global growth following news from China and the ECB's decision to restart its economic stimulus this week," said analysts at the Share Centre. In addition, the report showed the unemployment rate dropped to 3.8% in February from 4.0% in January, while the annual rate of wage growth accelerated to 3.4% from 3.1%.In the FTSE 100, Fresnillo closed up 2.2%. The Mexican gold miner was tracking the spot gold price higher, quoted at USD1,298.86 an ounce, up from USD1,285.30 at the London equities close Thursday. The precious metal rose as the dollar dipped following the US jobs report.Mid-cap Egyptian gold miner Centamin closed up 1.9%.At the other end of the large cap index, GVC ended as the worst performer, down 14% after its top brass sold around GBP20 million worth of shares in the UK gambling group.GVC, which owns high street bookie Ladbrokes, said Chief Executive Kenneth Alexander and Chair Lee Feldman offloaded a sizeable amount of stock.Alexander sold 2.1 million shares in the sports betting and gaming company on Wednesday at a price of GBP6.66 per share for a price of GBP13.7 million.Alexander still has 666,666 shares following the GBP13.2 million deal, a 0.1% stake in GVC. In combination with Alexander's existing share plan awards, he has 1.2 million shares in total including the 313,333 shares owned by his wife.Chair Feldman sold 900,000 shares, also on Wednesday, at the same price of GBP6.66 per share, for a total of GBP6.0 million. He retains 287,408 shares and has no existing share plan awards."The market is clearly confused as to why the pair have decided to sell down now if there is still value to be created," said AJ Bell's Russ Mould.Large cap peer Paddy Power Betfair closed down 2.0% while midcap bookmaker William Hill ended down 3.0% Friday.Analysts at the Share Centre attributed the fall in bookmaker's shares to reports the UK government might introduce a further tightening of regulations on the sector in the Spring Statement next week."While investors should take note of the [GVC share sales] they should also be aware that there are many reasons for a director to sell shares which have nothing to do with the company itself. Both Paddy Power Betfair and GVC are looking very much to the US for growth but they are both clearly exposed to further government action in the UK so investors should be cautious ahead of the Spring Statement," said Share Centre analyst Ian Forrest.Miners Antofagasta, Anglo American and Glencore closed down 4.0%, 2.3% and 2.0% respectively after China reported weak trade figures.China's exports declined 21% in February due to the Lunar New Year holiday and pressure from the trade war with the US, official data showed. Exports reached USD135.20 billion following the larger-than-expected annual drop. Chinese imports fell 5.2% year-on-year in February to USD131.10 billion.Royal Dutch Shell 'A' and 'B' shares closed down 1.5% and 1.8% respectively, while BP ended 1.2% lower amid lower oil prices. Brent oil was quoted at USD64.55 a barrel at the London equities close, down from USD66.06 at the close Thursday, amid a deteriorating global economic outlook and dismal US job growth figures. In the FTSE 250, SIG ended the best performer, up 8.4% after the building products firm swung to an annual pretax profit and issued a positive outlook. SIG's statutory revenue fell to GBP2.74 billion in 2018, from GBP2.88 billion in 2017, but it returned to pretax profit, posting GBP28.5 million from a GBP54.7 million loss a year prior.On an underlying basis, revenue fell 1.2% to GBP2.68 billion, with like-for-like sales down 2.1%. SIG's underlying pretax profit was up 8.5% to GBP75.3 million.The company said its transformation strategy is now beginning to take shape, with the second half of 2018 seeing "significant" progress.At the other end of the midcaps, Saga ended the worst performer, down 8.8% after JPMorgan downgraded the over 50s travel and insurance services provider to Underweight from Neutral.The US bank said Saga's weak balance sheet, alongside heightened insurance industry competition, could lead to concerns about its dividend being cut. Elsewhere, Debenhams ended 16% higher amid plans of a boardroom coup by sportswear tycoon Mike Ashley.The troubled department store chain said it is "disappointed" that Sports Direct International has decided to requisition a general meeting to appoint Sports Direct boss Ashley to the Debenhams board and remove all but one current board member. Debenhams added it has been engaging with both Sports Direct and other stakeholders regarding options to restructure the company's balance sheet. Sports Direct late Thursday said Founder & Chief Executive Ashley is seeking appointment to Debehmans board of directors. Ashley is aiming to be appointed to an executive role to focus on Debenhams business, including building a strong board and management team. Furthermore, Sports Direct is seeking to oust all Debenhams' board members with the exception of Rachel Osborne, who became a director in September 2018. If appointed, Ashley would step down from his current roles as a director & CEO of Sports Direct, which closed up 0.6%.The pound was quoted at USD1.3000 at the close, lower than USD1.3096 at the London equities close Thursday.In domestic political news, UK Prime Minister Theresa May tried to increase pressure on European leaders and dissenting lawmakers in parliament on Friday, exactly three weeks before the March 29 Brexit deadline.Addressing European leaders in a speech in Grimsby, eastern England, May said that negotiations aimed at getting her Brexit deal through British parliament needed "one more push"."European leaders tell me they worry that time is running out, and that we only have one chance to get it right," May said. "My message to them is: now is the moment for us to act".May also addressed UK members of the lower house, the House of Commons, saying they face a "crucial choice" on Tuesday on whether or not to back her deal with the EU.The comments come a day after the UK government confirmed that the parliament's lower house, the Commons, will hold a second vote on the Brexit divorce deal agreed with Brussels on Tuesday."The UK prime minister faces an uphill struggle to get her deal approved by Parliament. That means an extension to the Article 50 negotiating period now looks inevitable, but if this delay is kept relatively short, the threat of 'no deal' will remain. This would further reduce the chance of a rate hike this year," said analysts at ING. The euro stood at USD1.1239 at the European equities close, flat against USD1.1236 late Thursday. The single currency recovered after slipping to low of USD1.1185 overnight - its lowest level since mid-2017. "With the US (and probably also the eurozone) slowing further into 2020, we don't expect the ECB to hike the main refinancing rate over the forecasting horizon, meaning that money market rates are likely to remain negative throughout 2020," analysts at ING said. The economic events calendar on Monday has Germany trade data at 0700 GMT and US retail sales figures at 1230 GMT. The UK corporate calendar on Monday has full year results from shipping services firm Clarkson and Russian gold miner Polymetal International.

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Wednesday 1 May 
Anexo Group PLCFull Year Results
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Computacenter PLCTrading Statement
Georgia Capital PLCQ1 Results
GSK PLCQ1 Results
Haleon PLCTrading Statement
HSS Hire Group PLCFull Year Results
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Endeavour Mining PLCQ1 Results
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NAHL Group PLCFull Year Results
Reach PLCTrading Statement
Shell PLCQ1 Results
Smiths News PLCHalf Year Results
Smurfit Kappa Group PLCTrading Statement
Spectris PLCTrading Statement
Standard Chartered PLCQ1 Results
TI Fluid Systems PLCQ1 Results
Friday 3 May 
InterContinental Hotels Group PLCTrading Statement
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Trainline PLCFull Year Results
Monday 6 May 
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Tuesday 7 May 
Arecor Therapeutics PLCFull Year Results
BP PLCQ1 Results
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Comments and questions to newsroom@alliancenews.com
  
A full 21-day events calendar is provided each day with a subscription to Alliance News UK Professional.
  
Copyright 2024 Alliance News Ltd. All Rights Reserved.

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Aker BP Q1 beats forecast on record output, lower cost

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Comments and questions to newsroom@alliancenews.com
  
A full 21-day events calendar is provided each day with a subscription to Alliance News UK Professional.
  
Copyright 2024 Alliance News Ltd. All Rights Reserved.

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