(Alliance News) - Stock prices in London are seen opening higher on Friday, clawing back some of Thursday's lost ground and rounding off a largely decent week strongly.
The higher call in Europe is despite a "stomach churning" drop by Facebook-owner Meta Platforms and other US technology stocks on Thursday.
IG futures indicate the FTSE 100 index is to open 54.4 points, 0.7%, higher at 7,583.24. The large-cap index closed down 54.16 points, or 0.7%, to 7,528.84 on Thursday. The FTSE is up 0.8% so far this week.
European equities struggled on Thursday and ended lower after a pair of central bank policy decisions, including another rate hike by the Bank of England. The BoE lifted the Bank Rate by 25 basis points and came within one vote of a 50 basis point hike.
The ECB President Christine Lagarde, meanwhile, said risks to the inflation outlook were tilted to the upside. Although the ECB left monetary policy, investor focus has turned to later meetings and the prospect of an interest rate hike this year, something the central bank once labelled as unlikely.
The pound advanced following the BoE decision, but has since given back some ground. The euro has continued to rise.
The pound was quoted at USD1.3589 early Friday, down from USD1.3616 at the London equities close on Thursday. The euro stood at USD1.1455, up from USD1.1425. Against the yen, the dollar was trading at JPY114.96, up from JPY114.85.
The economic events calendar on Friday has UK construction PMI at 0930 GMT and the US nonfarm payrolls report at 1330 GMT.
"Traders and investors are focused on one thing and one thing only, and that is today's US NFP data. The risk is massively tilted to the downside, and the tone set by the US ADP data isn't optimistic at all. The private payroll number released on Wednesday confirmed that employment conditions have deteriorated, and we are likely to hear an echo of this message in today's number," Avatrade analyst Naeem Aslam commented.
"Overall, the bar is set too low once again, and if the actual number matches the forecast, we may see confidence strengthening among traders, which could spur a bull run. On the flip side, if we see a number that comes even weaker than the expectations, we could see the equity markets tanking further as traders will think that the Fed is getting ahead of themselves, and increasing interest rates may not be the best strategy at the moment."
According to FXStreet cited consensus, 150,000 jobs are expected to have been added in January, falling from 199,000 in December.
Wednesday's ADP figure showed employment decreased by 301,000 jobs, massively undershooting expectations of an addition of 207,000 jobs. In December, employment rose by 776,000, according to ADP.
Equities were higher in the Asia Pacific region. The Nikkei 225 in Tokyo rose 0.7% and the S&P/ASX 200 added 0.6%.
The Hang Seng in Hong Kong, having been closed since Monday, was up 3.2%. The stock market in Shanghai remained close on Friday as the Chinese New Year public holiday continues on the mainland.
In New York, the Dow Jones Industrial Average fell 1.5% on Thursday. The S&P 500 declined 2.4% and the Nasdaq Composite tumbled 3.7%.
Meta plunged 26% after its poorly received quarterly results.
"These are eye-watering, stomach churning moves normally associated with penny stocks, and yet they are happening in companies with billion-dollar market caps, such is the fragile nature of sentiment," CMC Markets analyst Michael Hewson commented.
More positively, Amazon, which had lost 7.8% in the main trading session on Thursday, rose 14% after hours following a strong set of quarterly results.
Brent oil was quoted at USD91.38 a barrel early Friday, up sharply from USD89.45 at the London equities close on Thursday. Gold stood at USD1,806.85 an ounce, up slightly from USD1,805.70.
The UK corporate calendar on Friday has third-quarter results from Airtel Africa and SSP Group.
By Eric Cunha; ericcunha@alliancenews.com
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