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(Alliance News) - Stocks in London snapped the week's losing streak on Friday ahead of a key US jobs release in the afternoon.
Consensus, according to FXStreet, expects the US economy to have added 300,000 net jobs in August, slowing from the 528,000 added in July. A stronger-than-expected figure could firm up expectations of a 75 basis point rate hike from the Federal Reserve later this month.
The unemployment rate is expected to remain unchanged at 3.5%, according to Lloyds Bank, while it expects annual earning growth to edge up to 5.3% in August from 5.2% in July.
"We're still seeing remarkable resilience in the US data, particularly the labour market, even if some cracks are appearing elsewhere. While the NFP and unemployment will naturally attract the most attention initially, it's the wages that could tip the balance at the central bank, with policymakers concerned about inflation becoming entrenched," said Oanda's Craig Erlam.
The FTSE 100 index was up 38.92 points, or 0.5%, at 7,187.42 midday Friday. The mid-cap FTSE 250 index was up 112.46 points, or 0.6%, at 18,606.20. The AIM All-Share index was down 1.47 points, or 0.2%, at 860.55.
The Cboe UK 100 index was up 0.8% at 718.58. The Cboe 250 was up 0.6% at 15,937.98, and the Cboe Small Companies up 0.1% at 13,755.18.
In mainland Europe, the CAC 40 in Paris was up 0.4%. Frankfurt's DAX 40 was up 1.2%, driven higher by its car makers, with Porsche Automobil Holding up 3.8%.
Wall Street was pointed for a muted, start ahead of the nonfarm payrolls data. The Dow Jones was called flat, the S&P 500 slightly lower, and the tech-heavy Nasdaq Composite down 0.2%.
The dollar was broadly higher heading into the US release, but the pound was staging a minor recovery after a dark week. Sterling was quoted at USD1.1565 midday Friday, higher than USD1.1534 at the London equities close on Thursday.
Sterling traders also were looking ahead to the unveiling on Monday of the next Conservative party leader in the UK, said Commerzbank.
Voting will close in the Conservative leadership contest at 5pm on Friday, before either Liz Truss or Rishi Sunak is announced as the new prime minister next week. Though voting closes on Friday, the result will not be announced until Monday.
Boris Johnson and his successor will then go to Balmoral in Scotland rather than Buckingham Palace in London for the appointment of the new prime minister, in a break from tradition. The Queen will receive Johnson on Tuesday at her Aberdeenshire summer home, where he will formally tender his resignation.
"Liz Truss is leading the polls. She is not exactly the favourite candidate of the financial markets. In particular her announcement that she would like to examine the [Bank of England's] mandate is likely to cause some concerns," said Commerzbank's You-Na Park-Heger.
"Should we see a surprise on Monday in the end, with Rishi Sunak being announced as the winner Sterling might benefit in an initial reaction," Commerzbank added. "However, fundamentally the outlook for sterling remains dampened."
The euro traded at USD0.9997, dipping from USD1.0044 late Thursday. Against the yen, the dollar was quoted at JPY140.33, up versus JPY139.94.
Brent oil was trading at USD94.26 a barrel, higher than USD92.53 late Thursday but still more than USD10 off the week's peak of USD105 a barrel.
Still, the recovery in oil prices lifted the likes of BP and Shell, up 2.3% and 1.3% respectively.
Shell lagged its fellow energy major on a Reuters report that Ben van Beurden is set to leave as chief executive next year after almost 10 years leading the firm.
Citing two company sources, the news agency said plans for Beurden's replacement are underway, with a succession committee, led by Chair Andrew Mackenzie, having met "several times in recent months".
Among the potential candidates are Wael Sawan, Shell's head of integrated gas & renewables, and Huibert Vigeveno, the head of its downstream refining operations, Reuters said.
Gold was quoted at USD1,706.26 an ounce Friday, up from USD1,694.00 on Thursday. Precious metals miner Fresnillo was up 2.4%.
At the bottom of the FTSE 100 were housebuilders, with Berkeley Group down 5.9%, Barratt Developments down 4.6% and Persimmon down 4.0%.
An estate and letting agent has predicted UK house prices are likely to stall next year as inflation continues to bite and mortgage rates rise, but rental prices will continue to increase despite affordability pressures on tenants.
Given the pressure on household incomes, Hamptons said it forecasts prices to be unchanged in the fourth quarter of 2023 compared with the same period in 2022, with 0% change across Britain. Sales are expected to be hit next year, with a drop stemming from mortgaged buyers, particularly first-time buyers, according to the forecast.
The estate agent said 2024 could be a "year of recovery" helped by some pent-up demand from 2023.
In the FTSE 250, Ashmore rose 5.5%, despite saying assets under management were hit by "widespread risk aversion" in the second half of its financial year, posting a dive in annual profit.
Assets under management fell to USD64.0 billion as at June 30 from USD94.4 billion a year prior, Ashmore reported. This 32% decline was due to negative investment performance of USD16.6 billion and net outflows of USD13.5 billion.
But the London-based emerging markets investment manager said it has a positive outlook, "underpinned by exceptionally attractive valuations across emerging markets".
Elsewhere, shares in Cineworld were up 31%, continuing their wild ride after last week warning it is considering filing for Chapter 11 bankruptcy in the US. Shares have more than doubled since the start of the week, but remain more than 90% below where they stood a year ago.
On AIM, Alliance Pharma fell 15% after saying it has appealed against the UK Competition & Markets Authority's decision to seek a competition disqualification order against its chief executive officer Peter Butterfield.
The CMA is currently seeking the disqualifications of a total of seven directors from four companies, including Alliance's Butterfield. The procedures are in consequence of anti-competitive agreements in relation to the sale of prescription prochlorperazine.
Alliance said that Butterfield did not participate in, or profit from, any market sharing arrangement. It added that he retains the full confidence and support of the Alliance board.
By Lucy Heming; lucyheming@alliancenews.com
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