LONDON MARKET MIDDAY: Oil lifts FTSE but CAC, DAX fall before US jobs

Fri, 04th Feb 2022 12:02

(Alliance News) - The FTSE 100 made muted gains midday Friday, with impetus provided by rising oil prices and strong quarterly results from Amazon unable to prevent cautious trade ahead of the latest US nonfarm payrolls report.

As traders digest a pair of central bank decisions on Thursday, the pound has weakened, though the euro has consolidated its post-European Central Bank gains. Attention now shifts to the US jobs report at 1330 GMT.

The FTSE 100 index was up just 7.23 points, or 0.1%, at 7,536.07. The mid-cap FTSE 250 index was down 101.77 points, or 0.5%, at 21,866.01. The AIM All-Share index was down 4.29 points, 0.4%, at 1,085.93.

The Cboe UK 100 index was 0.1% higher at 748.48. The Cboe 250 was down 0.8% at 19,543.64, and the Cboe Small Companies was 0.1% lower at 15,372.01.

In mainland Europe, the CAC 40 stock index in Paris was down 0.8% and the DAX 40 in Frankfurt was 1.4% lower.

Amazon, which had lost 7.8% in the main trading session in New York on Thursday, was up 11% in pre-market trade on Friday following a strong set of quarterly results.

On Thursday, shares in Facebook-owner Meta Platforms had dropped 26% on poorly received results posted late Wednesday. Meta was up 0.5% in pre-market trade on Friday.

"The FTSE 100 made a good start on Friday amid all the drama. Resources firms and Shell led the market higher on strong energy prices, with European oil sites being hit by cyber-attacks only adding to the pressures on crude supply," AJ Bell analyst Russ Mould commented.

Shell shares rose 3.6%, while peer BP added 2.9%.

Brent oil was quoted at USD92.60 a barrel midday Friday, up sharply from USD89.45 at the London equities close on Thursday.

Share price declines in the travel sector hurt London's blue-chip index.

British Airways-parent International Consolidated Airlines Group fell 2.1%, while Rolls-Royce and Melrose, which have exposures to the travel industry as equipment suppliers, lost 2.7% and 3.3%.

Among mid-caps, cruise ship firm Carnival fell 2.4%, and coach operator National Express gave back 2.8%.

Shaking off the travel sector malaise was SSP Group, which operates catering and retail units at rail stations and airports. The stock was up 1.1%.

In the four-month period from October 1 to January 30, SSP said that group revenue was at 62% of 2019 levels.

"The spread of the Omicron variant around the world and the subsequent government restrictions have inevitably had an impact on passenger numbers in many of our markets," SSP said.

Group sales in the more-recent eight weeks from December 6 stood at 57% of 2019 levels.

AJ Bell's Mould added: "Travel food hub operator SSP may have reported a big hit from Omicron ,but investors were largely content to look forward to sunnier horizons with a target of returning to pre-pandemic levels of profitability and sales growth by 2024."

London-listed exploration and production firms got a boost after Barclays went 'neutral' on the sector, having had a 'negative' stance previously.

It lifted its rating for West Africa-focused oil and gas producer Tullow to 'overweight' from 'equal weight'. Tullow shares were 4.5% higher. EnQuest rose 3.4% despite being cut by Barclays to 'equal weight' from 'overweight'.

FTSE 250-listed Capricorn Energy and Harbour Energy were up 2.6% and 2.0%.

Elsewhere in London, Joules was a standout AIM performer, as the consumer stock finally received some respite after three hefty falls in successive sessions. The stock was up 8.2% at midday.

The British lifestyle retailer's shares dropped 45% on Tuesday following another profit warning. Declines of 7.8% on Wednesday and 11% on Thursday followed.

The pound was quoted at USD1.3567 midday Friday, down from USD1.3616 at the London equities close on Thursday. The euro stood at USD1.1476, up from USD1.1425. Against the yen, the dollar was trading at JPY114.87, flat from JPY114.85.

Analysts at Lloyds Bank noted the pound initially got a boost following the Bank of England's decision to hike interest rates.

"The most significant move, however, was in the euro after the ECB's more hawkish pivot increased the likelihood of an interest rate rise later this year," Lloyds added.

On the UK political front, Prime Minister Boris Johnson is having to consider a reshape of his inner circle after four key advisers resigned, leaving him further isolated as he battles to keep his premiership alive.

Government ministers tried to argue the exodus was part of Johnson "taking charge" as he faces a potential leadership challenge amid allegations of lockdown rule-breaking parties in Downing Street.

Ahead of the US jobs report, stock index futures in New York were mixed on Friday, following a market sell-off on Thursday. The Dow Jones Industrial Average was called down 0.4% and the S&P 500 down 0.1%. However, the tech-heavy Nasdaq Composite, the worst-hit on Thursday, was pointed 0.6% higher.

According to FXStreet cited consensus, 150,000 jobs are expected to have been added in January in the US, 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,US employment rose by 776,000, according to ADP.

Gold stood at USD1,811.11 an ounce midday Friday, up from USD1,805.70 at the London equities close on Thursday.

By Eric Cunha; ericcunha@alliancenews.com