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(Alliance News) - Stocks in London traded lower around Friday lunchtime, with the blue-chip FTSE 100
consolidating gains after a record-breaking week, ahead of closely watched US nonfarm payrolls figures.
The FTSE 100 index fell 22.26 points, 0.3%, at 8,705.52. The FTSE 250 dipped 80.59 points, 0.4%, at 20,892.77. The AIM All-Share was down 0.34 of a point at 720.50.
The Cboe UK 100 was down 0.4% at 872.49, the Cboe UK 250 fell 0.5% to 18,223.64, and the Cboe Small Companies was down 0.3% at 15,638.63.
In Frankfurt, the DAX 40 was 0.1% higher, while the CAC 40 was 0.1% lower.
In New York, futures point to a subdued open on Wall Street. The Dow Jones Industrial Average and S&P 500 are seen little changed, and the Nasdaq Composite is called down 0.1%.
Much depends on US nonfarm payrolls, part of the US jobs report, due at 1330 GMT.
ING said the consensus is for a slowdown in payrolls growth to 175,000 in January from 256,000 in December. The broker itself projects a drop closer to 160,000.
ING said a lot of focus will be on annual benchmark revisions.
"Last year's provisional revisions indicated that, upon cross-referencing with tax data, the Bureau of Labor Statistics had overestimated job creation by approximately one-third. This points to significant issues with their model, and we anticipate substantial adjustments to the monthly payroll numbers."
Kathleen Brooks at XTB pointed out the August revisions triggered a steep sell off in global stock markets and a spike in volatility.
"The market eventually recovered; however, stock market sentiment in the US has been shaky this year, and the impact of these revisions could have a big impact on market sentiment," she suggested.
Brooks said the number of jobs created last year could be revised 700,000 lower for March 2024, which is a decline of 58,000 per month for the prior year, and there could be a further 234,000 downward revision to the household survey, which is used to create the unemployment rate.
"The main takeaway from the revisions, is that they could be a sign that the labour market is softer than expected. This could help the disinflationary process in the US, and justify a faster pace of rate cuts from the Fed," she added.
Also in the spotlight across the pond, Amazon, down around 2.8% in pre-markets trading after the ecommerce firm issued soft first quarter guidance after a strong end to 2024.
Amazon also plans to spend around USD100 billion in 2025 to bolster its infrastructure, including spend on data centres, chips and other equipment for artificial intelligence as it struggles to meet demand for its AI services.
Ahead of the US jobs figures, the pound nudged up to USD1.2448 on Friday afternoon, from USD1.2444 late Thursday. The euro rose to USD1.0381 midday London time from USD1.0375. Against the yen, the greenback climbed to JPY152.12 from JPY151.82.
Legal & General topped the charts in the FTSE 100, rising 4.7% after the well received sale of its US business.
London-based L&G is selling the US unit for USD2.3 billion to Japanese mutual life insurance firm Meiji Yasuda Life Insurance. The US insurance entity includes L&G's US protection and US pension risk transfer arms.
The duo will establish a "strategic partnership" and Meiji Yasuda may snap up a 5% stake in L&G.
The FTSE 100 listing said more than half of the deal proceeds, around GBP1 billion, will be returned to shareholders. L&G expects the transaction to complete towards the end of 2025.
Chief Executive Antonio Simoes called it a "transformative transaction" that brings "significant strategic and financial benefits".
Russ Mould at AJ Bell called it an "eye-catching deal".
He said it marked a "meaningful extension" to the two group's partnership although he accepted some investors are uncomfortable with the capital demands required in PRT.
"Perhaps the share buyback, returning a good chunk of the proceeds of the deal to shareholders, will help salve these concerns," he suggested.
Noting the taking of a 5% share stake, Mould said while there’s no suggestion this is the precursor to any sort of eventual takeover, it may nonetheless "set some tongues wagging."
Marks & Spencer slipped 2.5%.
The Financial Times suggested the flagship retailer could face an annual hit of GBP40 million from sustainability taxes.
The FTSE 100 retailer’s estimated yearly bill stems from packaging levies that will kick in from October, according to FT sources.
The levy, which is meant to reduce unsustainable packaging produced by UK retailers, is expected to generate as much as GBP2 billion a year from the sector, according to industry body the British Retail Consortium.
Housebuilders, strong in the wake of Thursday's UK rate cut, gave back ground on Friday. Barratt Redrow, the subject of a price target cut by UBS, fell 2.9%, Taylor Wimpey slipped 1.8% and Persimmon declined 1.5%.
Figures from mortgage lender Halifax showed UK house prices hit a record high at the start of the year, although the annual pace of growth slowed.
House prices rose 0.7% in January from December. They had fallen 0.2% in December from November.
"This increase pushed the average property price to a new record high of GBP299,138," Halifax analyst Amanda Bryden said.
However, the pace of annual growth eased to 3.0% in January, from 3.4% in December. It was the slowest annual growth since July.
"Affordability is still a challenge for many would-be buyers, but the market's resilience is noteworthy. There's strong demand for new mortgages and growth in lending. With a stamp duty increase looming, some of this demand may have come from first-time buyers eager to complete transactions before the end of March," Bryden added.
On the FTSE 250, International Workplace Group jumped 3.1% as Barclays upgraded the stock to 'overweight' from equal weight.
Brent oil was quoted at USD74.78 a barrel early Friday afternoon, rising slightly from USD74.71 at the time of the London equities close on Thursday. Gold firmed to USD2,866.66 an ounce, from USD2,851.18.
By Jeremy Cutler, Alliance News news editor
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