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(Alliance News) - Shares in London got off to a shaky start on Friday, with Hargreaves Lansdown dragging the FTSE 100, as focus turns to the all-important US jobs report this afternoon.
The FTSE 100 index was down 13.69 points, or 0.2%, at 7,491.10 early Friday, the index around 2.8% higher since the week began.
The mid-cap FTSE 250 index was down 30.39 points, or 0.1%, at 21,542.50. The AIM All-Share index was up 0.2% at 965.87.
The Cboe UK 100 index was down 0.2% at 12,691.33. The Cboe 250 was down 0.1% at 19,408.72, but the Cboe Small Companies was up slightly at 12,486.61.
"Global stock markets have been blessed with four straight days of gains this week. Whether we can get five-for-five will probably rest with the monthly US jobs figures later," London Capital Group's Jasper Lawler said.
In mainland Europe, the CAC 40 in Paris was down 0.1% while the DAX 30 in Frankfurt was 0.4% higher early Friday.
On the London Stock Exchange, Admiral was an early riser, gaining 1.5%, after it said it expects to increase its final payout by up to 18% following "better-than-expected" financial performance in 2019.
The insurer said it expects to report a pretax profit in the range of GBP510 million to GBP540 million in 2019, representing 6% to 13% growth on the prior year, thanks to higher-than-expected reserve releases in UK motor insurance.
The company's UK motor insurance business grew marginally in customer numbers during the year.
"The higher than expected profit is due to unusually positive development, during 2019, in the cost of UK motor bodily injury claims from a number of prior underwriting years. This has led to elevated reserve releases and profit commission revenue," Admiral explained in its statement Friday.
As a result, Admiral said it expects to propose a 73 pence to 78p per share final dividend for 2019, having paid a 66.0p a share a year ago. Admiral also said it will award its employees with a special cash bonus of GBP500, which will be paid in the first half of 2020.
Less positively, the company said its profitability continued to be hurt by higher levels of claims inflation during 2019 and as a result, Admiral expects its 2019 loss ratio to be higher than recent years.
Vodafone was sitting atop the blue-chip index, up 2.1%, after Jefferies upped the mobile operator firm to Buy from Hold.
At the other end of the FTSE 100, Hargreaves Lansdown was down 2.6% after Co-Founder Peter Hargreaves sold GBP550 million worth of stock in the fund supermarket, via an accelerated share bookbuild offering to institutional investors.
He sold 34.4 million shares at a price of 1,600.00 pence per share. Hargreaves Lansdown shares were trading at 1,650.00p early Friday.
Following the sale, Peter Hargreaves still holds an interest in about 24% of the company's issued share capital.
Also in the red, fashion brand Burberry, down 1.9%, said the coronavirus in China is having a "material negative effect on luxury demand".
Burberry said 24 of its 64 stores in mainland China are closed, with the open stores working on reduced operating hours - where footfall has declined "significantly".
"The spending patterns of Chinese customers in Europe and other tourist destinations have been less impacted to date but given widening travel restrictions, we anticipate these to worsen over the coming weeks," Burberry added.
Nonetheless, the fashion label said it is taking "mitigating actions" and is "confident" in its strategy.
In the FTSE 250, Mitchells & Butlers was up 2.4% after Berenberg raised the pub manager to Buy from Hold.
At the other end of the midcap index, Royal Mail was 2.6% lower after Bernstein cut the letter carrier to Underperform from Market-Perform. Royal Mail had been the worst mid-cap performer on Thursday, closing down 5.5%, after it said it will miss its productivity target, and warned its core UKPIL business could be loss-making in the up-coming 2021 financial year.
Elsewhere, estate agent Countrywide was down 5.6% after saying the sale of commercial property consultancy Lambert Smith Hampton has been delayed.
Countrywide agreed to sell LSH for GBP38 million to John Bengt Moeller in November, but Countrywide said Moeller was "indisposed" during January. Moeller also has experienced "logistical difficulties relating to the transfer of the requisite completion monies", the company said.
"We have been re-assured by Moeller that completion is imminent. The company continues to work with Moeller to resolve this situation urgently and is taking all necessary steps to achieve completion as soon as possible," Countrywide added.
Ahead in the economic events calendar is the US jobs report, due at 1330 GMT.
David Madden, market analyst at CMC Markets, commented: "The highlight of the session should be the US non-farm payrolls report. The update is expected to show that 160,000 jobs were added last month, which would be an improvement on the 145,000 that were posted in December. The unemployment rate is tipped to hold steady at 3.5% - which is a fifty year low. Yearly average earnings are tipped to come in at 3%, and that would be a slight increase on the 2.9% reading of December."
He continued: "The US labour market is clearly in great shape so it might be difficult to keep adding jobs at a sizeable rate. Traders are paying more attention to the wages component these days as workers who earn more tend to spend more. It is worth remembering that yesterday the jobless claims rate fell to 202,000, while on Wednesday the ADP report was 291,000."
Asian stocks gave back some of Thursday's strong gains following news the doctor who first warned the Chinese government about the deadly coronavirus has died from the disease.
Tokyo's Nikkei 225 index closed down 0.2%, while in China, the Shanghai Composite closed up 0.3%, and the Hang Seng index in Hong Kong ended 0.6% lower.
The doctor's death sparked an outpouring of grief and anger over a worsening crisis that has now killed more than 630 people.
At least 31,000 people have now been infected by a virus that ophthalmologist Li Wenliang and colleagues had first brought to light in late December.
The disease has since spread across China, prompting the government to lock down cities with tens of millions of people, while global panic has risen as more than 240 cases have emerged in two dozen countries.
A quarantined cruise ship in Japan now has 61 confirmed cases.
Chinese President Xi Jinping and US President Donald Trump, whose countries have tussled over trade and human rights, spoke on the phone about the health emergency on Friday.
"Sentiment has changed this morning in the Asian equity markets after a very strong start in February 2020. Hence, the global rally in risky assets we have seen in February seems to have taken a pause," Danske Bank said.
It continued: "Focus is still on the impact on the coronavirus, where the number of infected continues to rise, but at a slower pace."
Against the yen, the dollar was quoted at JPY109.92, marginally soft versus JPY109.96 late Thursday.
Elsewhere in forex, sterling was quoted at USD1.2938 early Friday, down from USD1.2990 at the London equities close on Thursday. The euro was trading at USD1.0974 early, slightly lower versus USD1.0980 late Thursday.
In commodities, gold was quoted at USD1,566.81 an ounce early Friday, versus USD1,563.48 on Thursday. Brent oil was at USD54.94 a barrel early Friday, lower than USD55.14 late Thursday.
By Paul McGowan; paulmcgowan@alliancenews.com
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