The London stock market struggled to find its groove on Friday, in nervous trade ahead of a US jobs report, which could give the Federal Reserve the green light to hike interest rates sooner.
Elsewhere, eurozone consumer price index figures showed the single currency bloc’s inflationary pressure ratcheted up in December, giving the European Central Bank something to ponder at the start of 2022.
The FTSE 100 index was down just 1.21 points at 7,449.16 midday Friday. The mid-cap FTSE 250 index was down 119.30 points, or 0.5%, at 23,297.62. The AIM All-Share index was down 3.21 points, or 0.3%, at 1,188.64.
The Cboe UK 100 index was up 0.1% at 739.17. The Cboe 250 was down 0.6% at 20,732.28, and the Cboe Small Companies was flat at 15,554.11.
The CAC 40 stock index in Paris was marginally lower, and the DAX 40 in Frankfurt was 0.2% lower.
The FTSE 100 has advanced just under 0.9% so far this week.
“It looks like investors are really trying to start 2022 in an optimistic spirit, but despite a clear diminishing of concern over Omicron, there are still enough worries out there to prevent them from getting carried away,” AJ Bell analyst Russ Mould commented.
The latest US nonfarm payrolls report is released at 1330 GMT, with 400,000 jobs expected to be added to the private sector economy, according to market consensus.
Mould continued: “A stronger-than-expected number might add to the impression given by the recently released minutes of the Fed’s latest meeting that rates are set to rise further and faster in the short term and provide another jolt to markets.”
The jobs report follows a hawkish set of Federal Reserve meeting minutes, which hinted at faster-than-expected tightening of monetary policy.
US stocks continued to be hit on Thursday but index futures suggest a calmer day for New York equities on Friday.
Before the US jobs report, the Dow Jones Industrial Average was called up 0.1%, the S&P 500 up 0.2% and the Nasdaq Composite up 0.3%.
The pound fetched USD1.3555 midday Friday, up from USD1.3534 at the London equities close on Thursday. Against the yen, the dollar was firm at JPY115.78 from JPY115.76.
The euro stood at USD1.1306, steady on USD1.1304.
The eurozone’s price growth showed little sign of slowing at the end of 2021, as the annual rise in the consumer price index accelerated to 5.0% in December, from 4.9% in November.
The European Central Bank’s inflation target is 2%. The last time the inflation rate sat below this target was in June. December’s figure was above market estimates of 4.7%, according to FXStreet.
“This is the peak, but the fall will be slow and uneven,” Pantheon Macroeconomics analyst Claus Vistesen commented.
Annual core inflation, which strips out energy, food, alcohol & tobacco, was stable at 2.6%, though above market estimates of 2.5%.
In London, shipping services firm Clarkson and luxury carmaker Aston Martin were among notable risers, up 4.7% and 3.1%, respectively.
Clarkson said trading in December was stronger than anticipated. It now expects underlying pretax profit for 2021 to be no less than GBP69 million, which would represent a 54% hike from GBP44.7 million in 2020.
Aston Martin, meanwhile, said it expects to deliver significant growth in 2022, but only after lowering its 2021 profit forecast due to fewer of its pricey Valkyrie AMR Pro supercars being shipped in the fourth quarter.
AJ Bell’s Mould added: The latest setback effectively adds up to another profit warning, whereby it shipped fewer Valkyrie vehicles than planned during the fourth quarter. The company says this is only a timing issue as it already has buyers lined up, hence why the share price has not collapsed on the news.”
Beyond hypercars, Executive Chair Lawrence Stroll said he was “extremely pleased” by Aston Martin’s core business.
“The evidence is there that our strategy is working, as retail sales are well ahead of wholesales supported by strong pricing and improving residual values. It is a very long time since the core business was in such good health as it is today,” Stroll said.
The Warwick-based luxury automaker said wholesales – meaning deliveries to dealers – grew 82% year-on-year to 6,182 units in 2021. The company noted that 3,001 DBX units wholesaled in first full year of production taking estimated 20% market share of the luxury SUV segment.
Meanwhile, retails – dealer sales to customers – outpaced wholesales.
C&C fell 4.1%. The Dublin-based beer, cider, wine, spirits and soft drinks maker said trading in December was hit by the fresh round of government curbs to combat Covid-19, following the emergence of the Omicron variant.
During the key festive period, C&C said it traded with 81% of on-trade outlets when compared with two years earlier, so before the onset of the pandemic. It delivered volumes of 64% of pre-virus times. Both undershot expectations of 90%.
“While December’s performance was consequently behind expectation, the group generated a modest profit for the month,” C&C added.
“The operating profit outcome for the H2 FY2022 period will be affected by the nature, extent and duration of government restrictions. Consequently, C&C will provide an updated operating profit range in its FY2022 pre-close trading statement in March.”
Among large cap stocks, miners were on the up. Rio Tinto was 2.3% higher, Anglo American climbed 2.1%, and BHP was up 1.8%.
British Airways-parent International Consolidated Airlines Group fell 2.4%, as the travel sector gave back some of its sizeable weekly gains. IAG shares are still up 11% so far this week.
Wizz Air was down 1.3%, while easyJet gave back 0.2%.
Gold was quoted at USD1,791.62 an ounce midday Friday, largely flat from USD1,791.00 at the London equities close on Thursday.
A barrel of Brent oil changed hands at USD82.52 midday Friday, firm on USD82.42 late Thursday.
Civil unrest in Kazakhstan has given Brent prices a lift in recent days.
London-listed miner Ferro-Alloy Resources, which operates in Kazakhstan, was trading 9.2% higher after an 11% drop on Thursday.
Caspian Sunrise was up 4.3% on Friday, recovering some of Thursday’s 16% loss.
Caspian on Thursday said it will suspend oil drilling and production activities in Kazakhstan, while Ferro-Alloy said it will continue operations as normal in its vanadium mine in the south of the country.
Kazakhstan’s president on Friday rejected calls for talks with protesters after days of unprecedented unrest, vowing to destroy “armed bandits” and authorising his forces to shoot to kill without warning, AFP reports.
President Kassym-Jomart Tokayev said earlier that order had mostly been restored across the country, after protests this week over fuel prices escalated into widespread violence, especially in main city Almaty.
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