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(Alliance News) - Stocks in London ended mostly higher on Friday after a positive US jobs report sparked hopes the Federal Reserve will view progress being made in the labour market as substantial.
The US economy saw a strong gain in hiring in July and the unemployment rate fell sharply, the Department of Labor reported.
Official data showed US nonfarm payroll employment rose by 943,000 in July, smashing market expectations, cited by FXStreet, for 870,000. In addition, June's reading was revised up to 938,000 from the initially reported figure of 850,000.
The US unemployment rate dropped by half of a percentage point to 5.4% in July from 5.9% in June. The latest reading also beat the market consensus forecast of 5.7%.
"The US jobs market has posted a solid set of figures for July with employment gains exceeding expectations, unemployment falling, wages accelerating and the participation rate increasing. Momentum is building toward early Federal Reserve policy action," said analysts at ING.
The FTSE 100 index closed up 2.52 points at 7,122.95. For the week overall, the flagship index ended the week up 0.6%.
The FTSE 250 ended down 49.95 points, or 0.2%, at 23,456.16 on Friday, and finished the week 1.8% lower.
The AIM All-Share closed up 5.53 points, or 0.4%, at 1,261.63 - and ended the week overall with a gain of 1.1%.
The Cboe UK 100 ended up 0.1% at 709.70, the Cboe UK 250 closed down 0.1% at 21,254.00, and the Cboe Small Companies ended up 0.4% at 15,406.10.
"European stocks have finished the week with more record highs for the FTSE250 and the Stoxx600, with financials leading the gainers as a result of this afternoon's decent US jobs report, which has helped to drive a rise in yields, in turn lifting the likes of Lloyds and Barclays higher, while NatWest Group shares hit their best levels this year, and their best levels since February 2020," said CMC Markets analyst Michael Hewson.
Banks NatWest, Lloyds and Barclays closed up 2.2%, 1.5% and 1.6% respectively.
In Paris the CAC 40 ended up 0.5%, while the DAX 30 in Frankfurt ended up 0.1%.
In the FTSE 100, London Stock Exchange Group ended the best performer, up 5.0%%. The exchange operator said it started the year well with cost savings from its integration of new acquisition Refinitiv running ahead of plan.
Revenue for the first half of 2021 jumped to GBP2.99 billion from GBP877 million a year ago, with pretax profit nearly doubling to GBP510 million from GBP262 million.
LSEG said the "favourable outlook" supports a 7% increase in its interim payout to 25.0 pence from 23.3p a year before. The firm added it progressed its integration of Refinitiv in the half-year, and its cost synergy programme is ahead of plan with GBP77 million realised in the period.
As a result, it raised full-year run-rate cost synergy guidance to GBP125 million from GBP88 million. LSEG completed its USD27 billion acquisition for financial market data and infrastructure provider Refinitiv in January after first making its interest clear back in July 2019.
Flutter Entertainment ended up 2.9% in a positive read-across from US peer DraftKings, which reported positive earnings as customers placed wagers on spring and summer sporting events like the US Masters, the NBA playoffs and Wimbledon tennis championships.
The Boston, Massachusetts-based firm reported a 26% jump in monthly revenue per user - a key metric in the sports betting industry. The stock was up 1.9% in New York.
Flutter Entertainment owns and operates US sports betting site FanDuel.
At the other end of the large-caps, Hikma Pharmaceuticals ended the worst performer, down 7.1%, despite posting interim profit growth and lifted the full-year outlook for its Generics division.
The drugmaker said revenue for the first half of the year rose 7% to USD1.22 billion as all three divisions - Generics, Global Injectables and Branded - performed well. Pretax profit rose 16% to USD319 million from USD274 million.
Generics delivered "strong" revenue growth and significant margin improvement, while Global Injectables saw modest sales growth after a stellar showing a year ago.
Branded achieved double-digit revenue growth and improved margins. It now expects Generics revenue in a range of USD810 million to USD830 million for 2021 as a whole, up from previous guidance of USD770 million to USD810 million to reflect a strong performance from recently launched products. Full-year forecasts for the other two units were retained.
Experian closed down 4.0% at 3,099.00 pence after the credit checking agency said Chief Financial Officer Lloyd Pitchford sold 49,559 shares on Wednesday and Chief Operating Officer Kerry Williams sold 59,332 on Thursday, at 3,251.04p and 3,246.07p, respectively. The deal together was worth GBP3.5 million. Pitchford now has 308,756 shares and Williams 183,455.
In the FTSE 250, Capita ended the standout performer, up 11%, after the outsourcer posted a slight first-half revenue fall, but backed itself to post annual growth as virus hit businesses recover.
The London-based firm, with customers in government, defence and healthcare, said revenue in the six months to June 30 slipped 3.8% year-on-year to GBP1.62 billion from GBP1.68 billion. However, adjusted revenue, so not including businesses it has exited, was largely flat at GBP1.58 billion.
Still, Capita swung to a pretax profit of GBP261.1 million from a GBP28.5 million loss a year earlier.
Vectura Group ended up 6.4% at 163.90p after the private equity group Carlyle increased its offer for UK-based pharmaceutical company, outbidding a rival proposal from cigarette maker Philip Morris International.
PMI shares were off 0.4% in New York.
Carlyle said it would pay 155.00p per Vectura share, valuing the company's issued and to be issued share capital at GBP958 million. In July, Philip Morris made a 150.00p per share offer.
Vectura, which makes treatments for diseases linked to smoking, withdrew its backing for the PMI offer. Carlyle's bid has received the backing of just over 11% of Vectura shareholders, the company said.
Wm Morrison Supermarkets finished up 2.5% after the supermarket chain agreed to an increased takeover offer from a consortium led by Softbank Group Corp-owned Fortress Investment Group.
Under the latest offer, shareholders will receive 272.00p for each Morrisons share they own, valuing the supermarket chain at GBP6.7 billion. The offer comprises of a 270.00p cash payment from the consortium and a 2.00p special dividend.
The latest bid is a 7.0% premium to the previous Fortress offer of 254.00p, which included 252.00p in cash per share, plus the 2.00p dividend. This valued Morrisons at GBP6.3 billion.
The dollar was higher against major counterparts in the wake of the strong US jobs number. The pound was quoted at USD1.3862 at the London equities close, down from USD1.3935 at the close Thursday.
The euro stood at USD1.1760 at the European equities close, down sharply from USD1.1843 late Thursday. Against the yen, the dollar was trading at JPY110.30, up from JPY109.71 late Thursday.
Stocks in New York were mixed at the London equities close as investors weighed upbeat jobs data against concerns about a faster shift in monetary policy.
The DJIA was flat, the S&P 500 index up 0.4% and the Nasdaq Composite was down 0.7%.
Brent oil was quoted at USD70.92 a barrel at the equities close, firm from USD70.85 at the close Thursday.
Gold was quoted at USD1,764.55 an ounce at the London equities close, sharply lower against USD1,802.55 late Thursday as the dollar strengthened.
The economic events calendar on Monday has China inflation readings overnight and Germany trade data at 0700 BST. Financial markets in Japan will be closed on Monday for the Mountain Day holiday.
The UK corporate calendar on Monday has annual results from fund supermarket Hargreaves Lansdown and interim results from shipping services provider Clarkson and recruiter PageGroup.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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