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London open: Stocks fall ahead of payrolls report
London stocks fell in early trade on Friday as investors eyed the release of the latest US non-farm payrolls report.
At 0820 GMT, the FTSE 100 was down 0.7% at 7,671.71.
The payrolls report for December is due out at 1330 GMT, along with the unemployment rate and average earnings. Expectations are for 170,000 jobs to have been added, compared to 199,000 in November, while the unemployment rate is expected to have ticked up to 3.8% from 3.7%.
Before that, the S&P Global/CIPS December construction PMI for the UK is scheduled for release at 0930 GMT.
Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, said: “The FTSE 100 has shed points today, as a lack of major corporate news means there’s nothing to offset anxiety about core US jobs data published later today. The data will help mould expectations for the Federal Reserve’s next interest rate decision, which has read-across for the fortunes of the UK. If the labour market shows signs of being too hot, it could add weight to the idea that rates will need to be held or raised.
“Expectations for rate cuts in March have come off the boil compared to a week ago, but this remains the market’s prediction overall. This is by no means guaranteed though – Fed commentary and market expectations aren’t fully on the same page.”
On home shores, data released earlier by Halifax showed that house prices rose again in December as mortgage rates fell.
House prices picked up 1.1% on the month following a 0.6% increase in November. This marked the third monthly increase in a row following six consecutive declines, and left the average price of a home at £287,105.
On the year, house prices rose 1.7% in December following a 0.8% decline the month before.
Kim Kinnaird, director, Halifax Mortgages, said: “Whilst it’s encouraging that we saw growth in the last three months of the year, this was preceded with property price falls for six consecutive months between April and September.
“The growth we have seen is likely being driven by a shortage of properties on the market, rather than the strength of buyer demand. That said, with mortgage rates continuing to ease, we may see an increase in confidence from buyers over the coming months.”
Investors were also mulling the latest figures from BRC-Sensormatic IQ, which showed that British shoppers headed out more reluctantly during the usually busy holiday period, with retail footfall seeing a notable decline.
Total UK footfall saw a 5% year-on-year decrease from 26 November to 30 December – a marked decline from November’s -0.7% year-on-year change.
High street footfall saw a 4.2% decrease in December compared to the same month the prior year, with November reporting a more modest -1.7% change.
Retail parks saw a 4.8% fall in footfall in December, a significant drop compared to the -1.0% change recorded in November.
However, shopping centres were hit the hardest with a substantial 7.4% decline in footfall in December, marking a notable drop from November’s -2.2% change.
“December’s heavy rain left many shoppers reluctant to brave the elements, who instead opted to browse online before making final purchases, or shop online altogether,” said British Retail Consortium chief executive officer Helen Dickinson.
“This led to a substantial decline in footfall levels compared to December 2022, when there was significant pent-up demand for in-store shopping post-Covid restrictions.
“Some cities, such as Edinburgh, bucked the trend, and saw footfall levels rise in December thanks to recent investment in new, exciting shopping destinations.”
Corporate news was thin on the ground, but Endeavour Mining tanked after it announced late on Thursday that president and chief executive Sebastien de Montessus had been dismissed with immediate effect for “serious misconduct”.
The sacking follows an investigation by the board into “an irregular payment instruction issued by him in relation to an asset disposal undertaken by the company”.
The amount of this irregular payment instruction is $5.9m and Endeavour said the board recently became aware of it in the course of a review of acquisitions and disposals, which is ongoing.
On the upside, shipping services provider Clarkson surged as it lifted annual guidance after strong trading during the final quarter of 2023, driven by its broking division. Underlying pre-tax profit is now expected to be at least £108m for the 12 months to December 31.
In broker note action, Experian was the standout gainer on the FTSE 100 following an upgrade to ‘outperform’ at Exane, but Mondi fell after a downgrade to ‘hold’ from ‘buy’ at Jefferies.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Gsk Plc | +0.30% | +4.60 | 1,544.40 |
| 2 |  |
Centrica Plc | +0.17% | +0.25 | 147.60 |
| 3 |  |
Morrison (wm) Supermarkets Plc | +0.00% | +0.00 | 286.40 |
| 4 |  |
Evraz Plc | +0.00% | +0.00 | 82.68 |
| 5 |  |
Micro Focus International Plc | +0.00% | +0.00 | 532.00 |
| 6 |  |
Reckitt Benckiser Group Plc | +0.00% | +0.00 | 6,498.00 |
| 7 |  |
London Stock Exchange Group Plc | +0.00% | +0.00 | 8,620.00 |
| 8 |  |
Rsa Insurance Group Ld | +0.00% | +0.00 | 684.20 |
| 9 |  |
Royal Bank Of Scotland Group Plc | +0.00% | +0.00 | 120.90 |
| 10 |  |
Standard Life Aberdeen Plc | +0.00% | +0.00 | 274.10 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Tui Ag | -4.81% | -29.00 | 574.50 |
| 2 |  |
Ashtead Group Plc | -3.24% | -170.00 | 5,076.00 |
| 3 |  |
Diageo Plc | -2.72% | -76.50 | 2,732.00 |
| 4 |  |
Fresnillo Plc | -2.65% | -14.40 | 528.60 |
| 5 |  |
Mondi Plc | -2.34% | -36.00 | 1,501.50 |
| 6 |  |
Ocado Group Plc | -2.26% | -16.60 | 717.60 |
| 7 |  |
Johnson Matthey Plc | -2.21% | -36.50 | 1,613.00 |
| 8 |  |
Croda International Plc | -2.01% | -94.00 | 4,573.00 |
| 9 |  |
Easyjet Plc | -1.91% | -9.50 | 487.70 |
| 10 |  |
International Consolidated Airlines Group S.a. | -1.86% | -2.85 | 150.45 |
US close: Stocks mostly lower as FOMC minutes remain in focus
Wall Street stocks closed mostly lower on Thursday following the release of minutes from last month’s FOMC meeting.
At the close, the Dow Jones Industrial Average was up 0.03% at 37,440.34, while the S&P 500 lost 0.34% to 4,688.68 and the Nasdaq Composite saw out the session 0.56% weaker at 14,510.30.
The Dow closed 10.15 points higher on Thursday, doing little to reclaim yesterday’s heavy losses that came amid ongoing speculation regarding central bankers’ potential moves around monetary policy.
Yesterday’s minutes from the latest Federal Open Markets Committee pointed to greater hawkishness than implied by the market reaction to its December meeting, indicating that policymakers had viewed the policy rate as likely to be “at or near its peak” for this tightening cycle.
However, they also noted that the path ahead will depend on “how the economy evolves” and reaffirmed that it “would be appropriate” for policy to remain at “a restrictive stance for some time” until inflation was clearly moving down “sustainably”.
On the macro front for Thursday, private sector employment in the US rose more than expected in December, according to ADP. Employment increased by 164,000 from November, versus expectations for a 115,000 jump. November’s gain was revised down to 101,000 from 103,000.
On another note, Americans lined up for unemployment benefits at a decelerated clip in the week ended 30 December, according to the Labor Department, hitting the lowest claim count since October. Jobless claims in the US fell by 18,000 to 202,000 in the final week of the year, firmly below market expectations for a reading of 216,000. The previous week’s level was revised up by 2,000 to 220,000.
Elsewhere, S&P Global‘s services PMI was revised slightly higher to 51.4 in December, up from a preliminary reading of 51.3, continuing to point to the strongest growth in the services sector in five months. New orders rose at the sharpest rate since June, with firms increasing hiring activity as a result.
In the corporate space, Walgreens Boots Alliance almost cut its dividend in half on Thursday despite reporting a significantly improved loss per share of $0.08 and a 10% sales jump, while Apple traded lower after analysts at Piper Sandler downgraded the tech behemoth just days after Barclays did the same as a result of overstretched valuations and uncertainty regarding future interest rate cuts from the Federal Reserve and fears that investors may have grown overly optimistic.
Friday newspaper round-up: Electric vehicles, Telegraph, Endeavour Mining
The number of new cars registered in the UK has jumped by nearly 18% but electric vehicle demand is flatlining, prompting the industry to call for a VAT cut to stimulate sales. Annual figures released by the Society of Motor Manufacturers and Traders (SMMT) on Friday show 1.9m new cars were registered last year, well up on the previous year’s figure of 1.6m and the highest level since the 2.3m registrations of 2019. – Guardian
Labour’s independent energy advisers have warned the party against watering down its £28bn green spending plans in advance of its promise to create a zero carbon electricity system by 2030. Experts at the climate thinktank Ember, which provided the independent analysis underpinning Labour’s green targets, said growing international competition for low-carbon investment from the US and EU could leave the UK lagging in the global race for low-carbon energy. – Guardian
The Abu Dhabi-backed fund pursuing a takeover of The Telegraph is pinning its hopes on an “editorial charter” and a trust of media luminaries it says will protect journalism. RedBird IMI, three-quarters funded by the Gulf autocracy, is seeking to persuade an inquiry by the media regulator Ofcom that it does not represent a threat to press freedom. – Telegraph
Endeavour Mining, the FTSE 100 mining group, has fired its chief executive for serious misconduct related to an irregular payment of $6 million and amid allegations over his personal conduct toward colleagues. Sébastien de Montessus, who was also president of the gold miner, has left with immediate effect. He had led the company since 2016 and took home nearly £9 million in 2022. – The Times
The Yorkshire city of Sheffield is to get a new competitor rail service to London, promising faster travel times than the existing trains. FirstGroup, the listed passenger transport company, has submitted plans to launch a so-called open access service between Sheffield and London King’s Cross from 2025. – The Times
