LONDON MARKET OPEN: Stocks soft, dollar up as US nonfarm payrolls near

(Alliance News) - It was a lower start for stocks in London as markets await the week's key event, Friday's nonfarm payrolls figure.

Friday's monthly labour market report, due at 1330 BST, is expected to show the US added 870,000 jobs in July, up from 850,000 in June.

"The reality is, whatever today's number is, the picture is unlikely to be any clearer after the numbers drop, than it is now, which means this month's Jackson Hole symposium probably won't offer investors the steer on monetary policy they hope it will," said Michael Hewson, chief market analyst at CMC Markets.

The traditional summer meeting of central bankers in Jackson Hole, Wyoming is hosted by the US Federal Reserve Bank of Kansas City. This year's event, formally called the Economic Policy Symposium, is being held in-person from August 26 to 28. The event has been held every year since 1978, and the Fed chair traditionally gives a policy speech.

The FTSE 100 index was down 11.24 points, or 0.2%, at 7,109.19 early Friday. The mid-cap FTSE 250 index was down 97.72 points, or 0.4%, at 23,408.39. The AIM All-Share index was flat at 1,256.06.

The Cboe UK 100 index was down 0.2% at 707.76. The Cboe 250 was down 0.4% at 21,173.35, and the Cboe Small Companies up 0.1% at 15,360.34.

In mainland Europe, the CAC 40 in Paris was down 0.2%, but the DAX 30 in Frankfurt was up 0.1% early Friday, led by chemicals firm Bayer and insurer Allianz. On Friday, Allianz reported net income of EUR2.36 billion for the second quarter, up 46% from EUR1.62 billion a year before.

The DAX was outperforming even after some weak German industrial production figures. Output fell 1.3% in June, steeper than the 0.8% decline reported for May and confounding expectations, according to FXStreet, for growth of 0.5%.

"The second quarter was a quarter to forget for German industry as output dropped in all three months. But once supply chain frictions start to dissolve, or in this case, the ketchup in the glass bottle, industrial production is likely to flood out," said ING.

The euro traded at USD1.1828 early Friday, soft on USD1.1843 late Thursday. Against the yen, the dollar rose to JPY109.73 versus JPY109.71.

Overall, the dollar was on the front foot heading into the jobs data.

Sterling was quoted at USD1.3926 early Friday, lower than USD1.3935 at the London equities close on Thursday.

Gold softened to USD1,800.59 an ounce early Friday from USD1,802.55 on Thursday. Brent oil was trading at USD71.64 a barrel early Friday, higher than USD70.85 late Thursday.

In Asia on Friday, the Japanese Nikkei 225 index ended up 0.3%. In China, the Shanghai Composite closed down 0.2%, while the Hang Seng index in Hong Kong was flat. The S&P/ASX 200 in Sydney ended up 0.4%.

Topping and tailing the FTSE 100 in early trade were London Stock Exchange Group and Hikma.

LSEG rose 3.6% after raising full-year cost synergies guidance for its acquisition of Refinitiv.

Revenue for the first half of 2021 jumped to GBP2.99 billion from GBP877 million a year ago, with pretax profit nearly doubling to GBP510 million from GBP262 million.

"LSEG has delivered a good financial performance in the first half of the year, reflecting revenue growth across all divisions," said Chief Executive David Schwimmer.

LSEG said the "favourable outlook" supports a 7% increase in its interim payout to 25.0 pence.

The firm added it progressed its integration of Refinitiv in the half-year, and its cost synergy programme is ahead of plan with GBP77 million realised in the period. As a result, it raised full-year run-rate cost synergy guidance to GBP125 million from GBP88 million.

LSEG finally completed its USD27 billion acquisition for financial market data and infrastructure provider Refinitiv in January after first making its interest clear back in July 2019.

Hikma shares fell 2.7%. The pharmaceutical firm said revenue for the first half of the year rose 7% to USD1.22 billion as all three divisions - Generics, Global Injectables and Branded - performed well. Pretax profit rose 16% to USD319 million from USD274 million.

Generics delivered "strong" revenue growth and significant margin improvement, while Global Injectables saw modest sales growth after a stellar showing a year ago. Branded achieved double-digit revenue growth and improved margins.

It now expects Generics revenue in a range of USD810 million to USD830 million for 2021 as a whole, up from previous guidance of USD770 million to USD810 million to reflect a strong performance from recently launched products. Full-year forecasts for the other two units were retained.

By Lucy Heming; lucyheming@alliancenews.com

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