LONDON (Alliance News) - London stocks are set to open in negative territory Monday as crude oil prices sink again and investors digest Friday's mixed US jobs report for December, which saw another month of strong employment gains and an upward revision to November's figures but a slowdown in wage growth.
The Labor Department's closely watched jobs report said US employment increased by 252,000 jobs in December after jumping by an upwardly revised 353,000 jobs in November, helping to push the unemployment rate down to 5.6% in December from 5.8% in November. Economists had forecast a rise of 245,000 jobs and a dip in the unemployment rate to 5.7%.
While the upbeat data suggest that the Federal Reserve will consider raising interest rates in the near future, the report also showed a slowdown in annual wage growth to 1.7% in December from 2.0% in November to record the slowest rate of growth since January of 2012.
"The market reaction was anything but positive as European markets and US markets slid back sharply, to finish a turbulent week in negative territory, albeit well off their lows, and this uncertainty looks set to weigh on the markets this morning as we start a new week with further softness in the oil price," says Michael Hewson at CMC Markets.
The FTSE 100 called to open 14 points lower at 6,487, down from Friday's close of 6,501.14 which contributed to a fall on the week of 1%. The DJIA ended Friday down 1% at 17,737.37, 0.5% lower on the week.
Brent crude is trading below USD50 a barrel again, quoted at around USD49.13 a barrel early Monday and US benchmark West Texas Intermediate was quoted at USD47.46.
"With oil prices already making some significant moves overnight it would take a brave person to bet against these high levels of market volatility continuing," says Craig Erlam at Alpari. "I think we're going to see plenty more volatility in the coming days as pressure mounts on oil producers to scale back production before prices get dangerously low."
Taylor Wimpey said it has entered 2015 with a record order book of GBP1.4 billion and said total home completions increased by 6% to 12,454 in 2014. Average selling prices on private completions increased by 11% to GBP234,000, a result of a shift to better quality locations and capturing market sales price increases, the house builder said.
AO World said website revenue for the three months to December 31 was up 38%, and total revenue, including third party retail and logistics, was up 26%. The online home appliance retailer said the outlook for the full year remains in line with expectations.
Shire shares will gain some attention after the pharmaceutical company on Sunday said it has agreed to acquire the US's NPS Pharmaceuticals Inc for USD46.00 per share in cash, in a deal worth a total of USD5.2 billion.
No significant economic data are scheduled for release Monday.
Japan is closed for Coming of Age Day. The Hang Seng in Hong Kong is up 0.4% at 24,009.32 and the Shanghai Composite is down 1.7% at 3,229.316.
By Ian Edmondson; ianedmondson@alliancenews.com
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Taylor Wimpey (TW.)
Ao World (AO.)
