London pre-open: Stocks seen lower ahead of payrolls report

Sharecast
Pre-open Market Report
06:35, 5th March 2021

(Sharecast News) - London stocks were set to fall at the open on Friday amid worries about inflation, as investors eyed the latest US non-farm payrolls report.
The FTSE 100 was called to open 50 points lower at 6,600.

The payrolls report is due out at 1330 GMT, along with the unemployment rate and average earnings.

CMC Markets analyst David Madden said: "Given that stocks have sold off due to fears about higher inflation being in the pipeline, a healthy jobs report might prompt dealers to trim their equity positions. On the other hand, a disappointing update could be interpreted as a sign the recovery is running out of steam, so the Fed will need to maintain its extremely loose monetary policy and that could assist sentiment.

"Stock markets in Europe had a mixed finish yesterday as concerns about firmer bond yields impacted equities once again. The FTSE 100 and the DAX 30 posted modest losses, the CAC 40 essentially ended the day unchanged, while the FTSE MIB posted a small gain. The tick higher in the US 10-year yield was playing on traders' minds throughout the day but there was a sharp move higher in the yield following the update from Jerome Powell, the head of the Fed.

"Mr Powell reiterated that the US central bank is a long way from achieving its goals, but he feels that job creation will pick up. The central banker anticipates higher growth, and with that, he cautioned about a temporary rise in inflationary pressure but for the now he doesn't think the move higher in inflation will be large enough or last that long to warrant a tightening of monetary policy."

In corporate news, London Stock Exchange Group posted a 3% rise in total revenues at constant exchange rates to reach £2.12bn.

Top-line growth was strongest in its Post Trade unit, which saw revenues climb 7% to £751m while those at the Information Services unit increased 3% to £882m.

On an adjusted basis meanwhile, earnings before interest, tax, depreciation, amortisation and impairments grew 5% to £1.33bn. The stock exchange operator lifted its full-year dividend payout by 7% to 75.0p.

Mike Ashley's Frasers Group has become the latest entity to attack UK Finance Minister Rishi Sunak's Budget, calling an extension to business rates relief a "worthless" package that would stop it taking over former Debenhams stores and force a review of its own estate.

In a short statement, Frasers said the £2m rates cap on businesses from July 2021 to March 2022, "makes it a near worthless support package for large retailers".

"For Frasers Group this cap will make it nearly impossible to take on ex-Debenhams sites with the inherent jobs created. It will also mean we need to review our entire portfolio to ascertain stores that are unviable due to unrealistic business rates."

Aggreko has agreed to be bought by two private equity firms in a deal valuing the FTSE 250 company at £2.3bn.

TDR Capital and I Squared Capital Advisors will pay 880p in cash for each of the power generator supplier's shares. The price is 39% more than the closing price on 4 February, the day before an offer period started, and 49% more than the average price in the preceding three months.

Disclaimer & Declaration of Interest

The information, investment views and recommendations in this article are provided for general information purposes only. Nothing in this article should be construed as a solicitation to buy or sell any financial product relating to any companies under discussion or to engage in or refrain from doing so or engaging in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the writer but no responsibility is accepted for actions based on such opinions or comments. Vox Markets may receive payment from companies mentioned for enhanced profiling or publication presence. The writer may or may not hold investments in the companies under discussion.

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