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(Alliance News) -Â The FTSE 100 continued to trade in the green at midday on Thursday as the day's closely-watched US jobs print for June looms, with economists pencilling in a further recovery in the labour market.
Remaining at the top of London's blue-chip index was Associated British Foods while DS Smith flagged at the other end.
The FTSE 100 index was up 39.93 points, or 0.7%, at 6,197.89 Thursday midday. The mid-cap FTSE 250 index was 174.76 points higher, or 1.0%, at 17,364.19. The AIM All-Share index was up 0.1% at 885.83.
In mainland Europe, the CAC 40 in Paris was up 1.2% while the DAX 30 in Frankfurt was 1.5% higher in the afternoon.
Encouraging vaccine news from Pfizer and BioNTech has provided a "more optimistic outlook for markets", said Joshua Mahony, senior market analyst at IG.
BioNTech of Germany and US pharmaceutical giant Pfizer reported positive preliminary results on Wednesday from a joint project to develop a coronavirus vaccine.
Known as BNT162b1, it produces antibody responses at or above the levels seen in any convalescent serum – blood from people who have recovered – at relatively low doses, according to BioNTech Chief Executive Officer Ugur Sahin. The preliminary data came from a so-called phase 1/2 trial that aimed to show the vaccine is not toxic and triggers an immune system response to prepare the body to fight off the virus.
"While the results provided hope for traders that we could soon return to normality, it is worthwhile noting that the process to approval is likely to be a long one that means a 2020 production looks unlikely," Mahony cautioned. "Meanwhile, the US continues to see Covid-19 cases spike, and market sentiment is likely to remain fragile as 12-states now embark on a move to reverse reopening plans. "
The US notched more than 52,000 new Covid-19 cases in 24 hours Wednesday, a tally by Johns Hopkins University showed, a new one-day record as infections surge around the country.
New daily case numbers have hovered around 40,000 in recent days, with Johns Hopkins recording 42,528 new infections one day earlier. Hospitalizations are also increasing in several cities, including Houston, Texas and Phoenix, Arizona.
On Wednesday Texas broke its daily record and reported 8,076 new cases of Covid-19, nearly 1,000 more than the day before.
The surge in cases has seen several states pause their re-openings. California on Wednesday banned indoor dining in Los Angeles as well as service in bars, cinemas and museums for at least three weeks.
Nonetheless, Wall Street is on course for a higher start on Thursday. The Dow Jones is called up 0.8%, the S&P 500 up 0.6% and the Nasdaq Composite up 0.4%.
In focus this afternoon is the US jobs report for June at 1330 BST - brought forward from the usual release day of Friday due to this week's Independence Day holiday.
Consensus is for 3.0 million jobs to have been added in June, up from 2.5 million in May, according to FXStreet. The unemployment rate is expected to edge down to 12.3% from 13.3%.
For context, April and March combined saw a loss of over 21 million jobs.
"There is significant uncertainty in the payrolls forecast, with economists' predictions varying between rises of 500,000 to 900,000," Lloyds Bank noted.
"The ADP report yesterday revealed a 2.4mln rise in private sector payrolls in June, but it is not clear how good a guide it will be for today's official number (last month's ADP figures were revised sharply)," said Lloyds. "Looking ahead, it remains to be seen to what extent renewed Covid-19 cases in parts of the country will affect jobs growth in the coming months."
The dollar was mostly lower ahead of the jobs print.
Sterling was quoted at USD1.2517 on Thursday, up from USD1.2459 at the London equities close on Wednesday. The euro traded at USD1.1285, higher than USD1.1260 late Wednesday.
The eurozone unemployment rate edged upwards in May as Covid-19 lockdowns continued to take a toll, data from Eurostat showed Wednesday, though not as sharp as consensus expected.
The eurozone seasonally adjusted unemployment rate was 7.4% in May, up from 7.3% in April, but still beat market consensus, which according to FXStreet had anticipated an increase to 7.7%. Compared with April, the number of those out of work increased by 253,000.
Germany's parliament is expected to put to bed Thursday fears that the country's powerful central bank could be barred from participating in a crucial eurozone-wide bond-buying scheme.
In a stunning decision in May, Germany's Federal Constitutional Court threatened to block the Bundesbank, the central bank, from taking part in the stimulus plan unless the European Central Bank could show within three months that its government debt purchases are not "disproportionate".
Based on an early June decision by the ECB governing council and documents forwarded to Berlin, the Bundestag is expected Thursday to say it is satisfied the bank did not overstep its mark.
"The Bundestag concludes based on the decision of the ECB Council and the documents received that the requirements contained in the FCC's May 5 judgement for carrying out a proportionality check linked to the PSPP are fulfilled," a draft cross-party text seen by AFP certifies.
Against the yen, the dollar was quoted at JPY107.48, soft versus JPY107.52.
Gold was quoted at USD1,772.30 an ounce on Thursday, up from USD1,764.23 on Wednesday. Brent oil was trading at USD42.32 a barrel, higher than USD41.80 late Wednesday.
In London at midday, Associated British Foods was up 5.5%, sat atop the FTSE 100. AB Foods reported a double-digit revenue fall for the past nine months and said it expects profit at low-cost fashion retailer Primark to be a third of what was achieved a year ago. However, nearly all Primark stores have now reopened and early sales have been strong.
AB Foods group revenue for the 40 weeks to June 20 was down 13% on a year ago at constant currency, with sales down 39% in the third quarter alone. Among divisions in the third quarter, grocery was the stand-out performer, with revenue up 9%, while retail sales at Primark slumped a sharp 75%.
Primark stores were closed for most of the third quarter, with revenue recorded in the period relating to two short periods of trading before stores closed in mid-March and after they started to reopen at the end of the quarter.
AB Foods said Primark stores have reopened more quickly than expected, particularly in Ireland, since its June 1 trading update. A total of 367 stores now have reopened, with the remain 8 expected to follow in the near future, it said.
Trading in the reopened stores so far has been "reassuring and encouraging".
DS Smith fell 8.5% after deciding against a final dividend.
For the 12 months to April 30, the London-headquartered packaging firm's pretax profit improved 5.1% to GBP368 million from GBP350 million. Revenue, however, slipped 2.1% to GBP6.04 billion from GBP6.17 billion.
The packaging firm has already declared it would not issue an interim dividend, but has now also decided against a final dividend too - as its short term outlook "remains too uncertain". DS Smith added, however, it "will actively consider the resumption of dividend payments", when it has "greater clarity" over its outlook.
Meggitt shares advanced 6.7% despite saying it expects a sharp drop in revenue in the first half of 2020, with falling revenue in its Civil Aerospace and Energy offsetting any growth in Defence.
Coventry-based Meggitt said Civil Aerospace organic revenue in the six months that ended on Tuesday is expected to be about 30% lower, with its Jets business struggling.
Its Energy unit expects to see revenue down 10% year on year, reflecting weaker market conditions in oil and gas and power generation sectors. Meggitt's Defence unit, however, is expected to deliver organic revenue growth of mid-single digits.
Meggitt said it made "good progress" in its plan to reduce cost base, preserve cash and resize its business.
Mitchells & Butlers was up 5.1% after the pub company reported a robust first half prior to the onset of Covid-19 disruption.
Revenue for the 28 weeks to April 11 was GBP1.04 billion, down from GBP1.19 billion recorded a year prior, resulting in a pretax loss of GBP121 million versus a GBP75 million profit.
"The business was performing very well before the enforced closure in response to Covid-19, building on the strengths of our estate of mainly freehold properties, our diversified and well-loved brands and our team's industry leading operational skills," explained Chief Executive Phil Urban.
Prior to the lockdown, like-for-like sales growth was 2.6% in the first quarter, which was followed by a period of softer sales due to the stormy weather, but Mitchells & Butlers said it remained 1% ahead of the market.
By Lucy Heming;Â lucyheming@alliancenews.com
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