London pre-open: Stocks to rise ahead of payrolls report

(Sharecast News) - London stocks were set to rise at the open on Friday as investors eyed the release of the latest US non-farm payrolls report.
The FTSE 100 was called to open 28 points higher at 6,518.

CMC Markets analyst David Madden said: "It was a mixed bag for European equity markets yesterday as the FTSE 100 closed modestly higher while the indices in mainland Europe posted losses. The same old themes were in the mix as the health crisis is playing on traders' minds but at the same time, the news surrounding vaccines is doing the rounds too.

"The UK is hoping to issue the first doses of the Pfizer-BioNTech vaccine within a few days, while it is looking likely that vaccines won't be distributed in the EU until early January."

On the macroeconomic front, the payrolls report, unemployment rate and average earnings are all due at 1330 GMT. Ahead of that, Markit's UK construction PMI for November is at 0930 GMT.

Madden said the payrolls are expected to show that 469,000 jobs were created last month, and that would be a drop from the 638,000 registered in October.

"The unemployment rate is tipped to be 6.8%, down from the 6.9% in previous update, and the yearly average earnings metric is expected to slip from 4.5% to 4.3%. A fall in wages could be viewed as positive for the economy as it could be an indication that more lower-income workers have returned to the workforce," he said.

In corporate news, Berkeley Group stuck to its targets for shareholder returns as the housebuilder reported a 16.6% fall in first-half profit caused by the Covid-19 crisis.

Pre-tax profit for the six months to the end of October dropped to £230.8m from £276.6m a year earlier as revenue declined 3.8% to £895.9m.

The FTSE 100 company said it was on track to achieve a pre-tax return on equity of at least 15% for the six years to April 2025 and to return £280m a year to shareholders by September 2025 with £140m due to be paid before March 2021.

Associated British Foods said the autumn Covid-19 lockdowns would cost it £430m as it reported strong demand at Primark stores that had reopened.

The company said it would continue to expand retail selling space and that Primark's sales and profit would be higher in the current year than the year before. Trading in grocery, sugar, ingredients and agriculture is ahead of expectations, the company said in a statement for its annual general meeting.

SSE said it had sold a 10% stake in the first two phases of Dogger Bank Wind Farm to Eni for £202.5m as it lifted guidance for the 2020/21 fiscal year.

The company said its earnings per share would now be in a range of 85p-90p, up from previous guidance of 75p-85p including an EPS impact from the gain on sale of around 19 pence.