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London open: Stocks flat as investors eye payrolls
London stocks were flat in early trade on Friday following a record close a day earlier, as investors eyed the latest US non-farm payrolls report.
At 0845 GMT, the FTSE 100 was steady at 8,724.55.
Derren Nathan, head of equity research at Hargreaves Lansdown, said: “The widely-expected UK rate cut hasn’t been enough to help propel the FTSE 100 beyond yesterday’s record close, as investors take on board the Bank of England’s hammer blow to its forecast for UK economic growth, amid worries about stagflation taking hold. GDP is now expected to grow just 0.75% in 2025. The pound weakened further against the US dollar as governor Andrew Bailey hinted at further rate cuts to come.
“US non-farm payrolls later today, expected to have added 169,000 jobs last month will provide a temperature check on the US economy. In stark contrast to the UK, the US Chamber of Commerce expects GDP to rise over 3% this year.”
The payrolls report for January is due at 1330 GMT, along with the unemployment rate and average earnings.
On home shores, the latest house price index from Halifax showed that prices jumped in January to reach fresh highs, reversing December’s fall.
Prices rose by a surprise 0.7% in January, following a 0.2% dip a month earlier. Analysts had been expecting a far smaller improvement of 0.2%.
The average property price now stands at £299,138 – a new record high.
However, growth slowed marginally year-on-year, to 3% from 3.4% in December. It was the slowest annual rate since July.
Amanda Bryden, head of mortgages at Halifax, said: “Affordability is still a challenge for many would-be buyers, but the market’s resilience is noteworthy.
“There’s strong demand for new mortgages and growth in lending. With a stamp duty increase looming, some of this demand may have come from first-time buyers eager to complete transactions before the end of March.
“Despite geopolitical uncertainties and waning consumer confidence, other key indicators look fairly positive for the housing market.”
Elsewhere, industry data showed retail footfall jumped in January as shoppers braved winter weather to hit the January sales.
According to the latest BRC-Sensormatic footfall monitor, total footfall increased by 6.6% last month, comfortably reversing December’s 2.2% decline. All types of destinations saw an uptick in footfall, led by retail parks and shopping centres.
Footfall had been flat in December in retail parks, but jumped 7.9% in January, while shopping centres saw a 7.4% increase following a 3.3% decline a month earlier.
On high streets, footfall rose by 4.5%, compared to a 2.7% dip in December.
Helen Dickinson, chief executive of the British Retail Consortium, said: “Store visits increased substantially in the first week of the month, as many consumers hit the January sales.
“Despite snowy weather and Storm Eowyn causing disruption in some areas, footfall was still positive across major UK cities over the whole month.”
In equity markets, Legal & General shot to the top of the FTSE 100 as it announced the sale of its US protection business to Japanese peer Meiji Yasuda, with the latter taking a 5% stake in L&G in a deal worth $2.3bn.
The transaction will kickstart a long-term strategic partnership between the two companies to support growth ambitions in US Pension Risk Transfer and asset management markets. L&G intends to launch a £1.0bn buyback following completion, which is expected towards the end of 2025.
Victrex was little changed as it held guidance after a solid first-quarter performance saw revenues rise 9% but warned trading conditions remain mixed, with medical revenues continuing to be subdued on a year-to-date basis, driven by ongoing industry destocking among its customers.
International Workplace Group rallied after an upgrade to ‘overweight’ at Barclays, while Wizz Air was boosted by an upgrade to ‘buy’ at HSBC.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Legal & General Group Plc | +6.91% | +16.50 | 255.40 |
| 2 |  |
Bae Systems Plc | +1.35% | +16.00 | 1,201.00 |
| 3 |  |
South32 Limited | +1.18% | +2.10 | 180.50 |
| 4 |  |
Vodafone Group Plc | +1.12% | +0.76 | 68.76 |
| 5 |  |
International Consolidated Airlines Group S.a. | +1.02% | +3.70 | 367.10 |
| 6 |  |
Gen.acc.8se.pf | +0.75% | +1.00 | 135.00 |
| 7 |  |
Bp Plc | +0.70% | +3.00 | 432.00 |
| 8 |  |
National Grid Plc | +0.59% | +5.80 | 983.00 |
| 9 |  |
Severn Trent Plc | +0.57% | +14.00 | 2,482.00 |
| 10 |  |
Coca-cola Hbc Ag | +0.54% | +16.00 | 3,006.00 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Wise Plc | -2.65% | -30.00 | 1,101.00 |
| 2 |  |
Gsk Plc | -1.93% | -28.50 | 1,451.00 |
| 3 |  |
Marks And Spencer Group Plc | -1.87% | -6.60 | 346.70 |
| 4 |  |
Barratt Redrow Plc | -1.70% | -7.70 | 445.30 |
| 5 |  |
Intermediate Capital Group Plc | -1.60% | -38.00 | 2,342.00 |
| 6 |  |
Smurfit Westrock Plc | -1.55% | -69.00 | 4,385.00 |
| 7 |  |
Auto Trader Group Plc | -1.48% | -11.60 | 772.20 |
| 8 |  |
Astrazeneca Plc | -1.29% | -152.00 | 11,634.00 |
| 9 |  |
Smith & Nephew Plc | -1.02% | -10.50 | 1,014.50 |
| 10 |  |
Barclays | -1.01% | -3.10 | 304.40 |
US close: Stocks mixed after earnings barrage
US stock markets were searching for direction on Thursday following a barrage of blue chip corporate earnings that received a mixed reaction from investors, while labour-market data was in firm focus.
The S&P 500 and Nasdaq gained 0.4% and 0.5% respectively – rising for the third straight session – but the Dow declined 0.3%.
“US stocks have run into some turbulence after their rebound from Monday’s lows, weighed down by some gloomier earnings and the impending payrolls report,” said Chris Beauchamp, chief market analyst at IG.
“Investors have been able to put tariff worries aside after Monday’s rout, but they are sure to rear their head again, and the damage to stocks next time might be more long-lasting.”
Risk appetite was also being held back ahead of Friday’s all-important jobs report, with analysts expecting non-farm payrolls to rise by 169,000 in January, down from the bumper level of 256,000 announced for December.
“Payrolls are set to lose momentum at the start of 2025, with temporary shocks helping to keep the headline gain under the 200k mark,” said analyst at TD Securities.
On the macro front, initial jobless claims rose by 11,000 to 219,000 last week, above market expectations of 213,000. Continuing claims rose by 26,000 to 1.88m, also coming in ahead of expectations of 1.87m. Meanwhile, the four-week-moving average, which aims to strip out week-to-week volatility, rose by 4,000 to 216,750 on the back of sharp increases in New York and California.
In other news, a preliminary reading of fourth-quarter non-farm productivity showed an increase of 1.2%, according to the Bureau of Labor Statistics, short of expectations for a 1.4% rise and following a revised 2.3% improvement in the third quarter. Output grew 2.3%, while hours worked rose 1.0%. On an annualised basis, labour productivity was up 1.6%.
Market movers
Chip stocks were under pressure with Qualcomm and Arm both heading south as their latest sets of quarterly figures underwhelmed investors. Both companies beat expectations with their results, though analysts highlighted growth headwinds for Qualcomm while Arm cut the top end of its sales guidance. Smaller peer Skyworks Solutions also plummeted by more than fifth after its figures.
Ford Motor was also a heavy faller on the back of gloomy guidance for 2025. The auto giant surpassed forecasts with its fourth-quarter results, but said that a subdued outlook for this year “presumes headwinds related to market factors”.
Fast food business Yum Brands jumped after quarterly earnings and revenue beat estimates thanks to strong sales at KFC’s international locations and Taco Bell.
Drugmaker Eli Lilly posted a surge in fourth-quarter revenues, fuelled by strong demand for its blockbuster diabetes and weight-loss drugs. However, shares in fellow pharmaceutical giant Bristol Myers Squibb headed south as its solid fourth-quarter revenue performance was offset by FY25 guidance that fell short of Wall Street expectations.
Peloton‘s share price raced ahead after the fitness equipment maker impressed with a strong set of second-quarter sales figures an upgrade to full-year forecasts.
Honeywell‘s plans to break itself up were met with a negative reaction from the market. Following pressure from activist investor Elliott Investment Management, the industrial conglomerate said it would separate its aerospace division from its automation business, while simultaneously proceeding with a previously announced spin-off of its advanced materials unit.
Strong sales of vapes and nicotine pouches helped tobacco giant Philip Morris International beat forecasts with its fourth-quarter results, as the manufacturer posted full-year guidance ahead of consensus, causing the stock to light up.
Also in demand was fashion brand Ralph Lauren after lifting annual revenue guidance following better-than-expected third-quarter earnings.
Friday newspaper round-up: Gambling sector, FOS, Amazon
The gambling regulator has accidentally handed over more than 4,000 sensitive documents to lawyers acting for the media tycoon Richard Desmond, in an “unprecedented” blunder during its legal battle over the £6.4bn national lottery contract, the Guardian understands. Northern & Shell (N&S), the investment group owned by Desmond, is suing the Gambling Commission for £200m in damages over its handling of the lottery licence award process. – Guardian
Two former senior figures at bankrupt Woking council are to be investigated by the UK’s accounting watchdog after it racked up more than £2bn in debt on a failed investment spree. The Surrey council declared itself effectively bankrupt in 2023 after ploughing vast sums of borrowed money into skyscrapers, a luxury hotel and other risky commercial investments, in what was one of the biggest financial failures in local government history. – Guardian
Sir Keir Starmer has signalled plans to approve a major oil development in the North Sea despite opposition within his Cabinet. The Prime Minister on Thursday suggested he would not stand in the way of the Rosebank oil field as a license had previously been granted. The future of Rosebank, which is backed by Norway’s Equinor, has been in doubt after a court overturned its permit by ruling the previous government had failed to take into account climate concerns. – Telegraph
The head of a leading consumer watchdog has been ousted amid Rachel Reeves’s push to spur growth. Abby Thomas unexpectedly quit as chief executive of the Financial Ombudsman Service (FOS) on Thursday, which is responsible for resolving disputes between City firms and their customers. – Telegraph
Amazon missed sales expectations for its cloud computing business, fuelling concerns about the tens of billions of dollars it has invested in artificial intelligence infrastructure. Amazon Web Services, the cloud computing business, reported fourth-quarter revenue of $28.79 billion, below Wall Street estimates of $28.84 billion. – The Times
