LONDON MARKET OPEN: Stocks rebound on oil and travel; US jobs ahead

(Alliance News) - After a volatile week, the mood in London appeared to be calmer on Friday with Omicron-battered stocks such as airlines and oil advancing.

However, plain sailing into the weekend is far from guaranteed with the latest US nonfarm payrolls figure due in the European afternoon.

The FTSE 100 index was up 24.88 points, or 0.4%, at 7,154.09 early Friday. The mid-cap FTSE 250 index was up 136.54 points, or 0.6%, at 22,821.38. The AIM All-Share index was up 2.75 points, or 0.2%, at 1,191.49.

The Cboe UK 100 index was up 0.4% at 709.30. The Cboe 250 was up 0.5% at 20,299.14, and the Cboe Small Companies up 0.1% at 14,862.67.

In mainland Europe, the CAC 40 in Paris and the DAX 40 in Frankfurt were both up 0.8% early Friday.

"Markets have regained some poise at the end of a difficult week which was marred by Omicron fears and an increasingly hawkish outlook from central banks," said Richard Hunter, head of markets at interactive investor.

Stocks which have come under recent pressure, such as airlines, saw some respite on Friday. British Airways-parent International Consolidated Airlines rose 2.7%, the best performer in the FTSE 100.

In the FTSE 250, easyJet rose 2.8% and cruise operator Carnival rose 2.8% also. Anglo-German tour operator Tui bounced 2.7%.

Oil major BP advanced 2.1% and Royal Dutch Shell 'A' and 'B' shares rose 1.2% and 1.4% respectively. Brent oil was trading at USD71.42 a barrel early Friday, rising from USD69.67 late Thursday.

Despite Friday's upbeat start, Hunter warned: "Volatility is likely to remain in place for the remainder of the year, with regular switches between the risk-on and risk-off trade as further news emerges."

Besides Omicron, Friday's biggest risk event comes from the latest US monthly jobs report, due at 1330 GMT.

Consensus is looking for a November nonfarm payrolls figure of 550,000, according to FXStreet, which would be up from 531,000 in October.

Sterling was quoted at USD1.3274 early Friday, lower than USD1.3317 at the London equities close on Thursday. The euro traded at USD1.1285, down from USD1.1315 late Thursday.

Against the yen, the dollar was quoted at JPY113.32, up from JPY113.03.

Elsewhere, the economic events calendar on Friday has services PMI readings from Germany, the eurozone, UK and the US at 0855 GMT, 0900 GMT, 0930 GMT and 1445 GMT respectively.

Gold was quoted at USD1,768.10 an ounce early Friday, higher than USD1,761.10 on Thursday.

In Asia on Friday, the Japanese Nikkei 225 index ended up 1.0%. The S&P/ASX 200 in Sydney closed up 0.2%.

In China, the Shanghai Composite closed up 0.9%, while the Hang Seng index in Hong Kong ended down 0.1%.

Hong Kong failed to ride wider risk-on sentiment after the US adopted a rule allowing reguators to delist foreign companies from Wall Street exchanges if they fail to provide information to auditors, which is aimed primarily at Chinese firms.

The mandate requires companies to disclose whether they are "owned or controlled" by a government, the Securities & Exchange Commission said.

Meanwhile, growth in the service sector of the Chinese economy slowed in November, as a sharp rise in input costs forced service providers to raise their own prices to customers, according to the results of a survey by IHS Markit released on Friday.

The Caixin China general services purchasing managers' index read 52.1 points last month, down from 53.8 in October. The score remained above the neutral 50-point mark for the third month in a row but was the weakest reading of the three, IHS Markit noted.

Total new business rose at the slowest rate in three months, with service providers saying that measures imposed by the government in Beijing to control the spread of Covid-19 hurt new order inflow, while foreign demand increased only slightly.

Back in London, Rotork shares rose 4.4% after JPMorgan raised the stock to Overweight from Neutral.

Wickes shares jumped 7.2% after the firm lifted its full-year adjusted pretax profit guidance to no less than GBP83 million.

The building supplies retailer noted that current analyst profit consensus lies around GBP74 million to GBP75 million.

Friday's upgrade comes after a strong performance in the fourth quarter to date. Core sales are lower year-on-year against tough comparatives, but remain materially ahead on a two-year basis, the company noted.

Wickes boasted that its business model and strong supplier relationships have led to a better-than-expected margin performance, as it has been able to mitigate inflationary pressures.

"Our forward planning and early strategic decisions have resulted in an improved profit performance, and we continue to navigate inflationary pressures and raw material constraints well. Clearly, this remains a time of uncertainty, however our differentiated business model leaves us well-placed to continue to outperform within a large and growing home improvement market," said Chief Executive David Wood.

By Lucy Heming; lucyheming@alliancenews.com

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