Stock prices in London opened lower on Friday amid concerns over the pressure of monetary tightening on equities, ahead of a US non-farm payrolls print.
The FTSE 100 index opened down 30.14 points, 0.4%, at 7,250.36. The FTSE 250 was down 47.77 points, 0.3%, at 17,868.69, and the AIM All-Share was down 1.08 points, 0.2%, at 739.78.
The Cboe UK 100 was up 0.4% at 723.11, the Cboe UK 250 was down 0.6% at 15,651.95, and the Cboe Small Companies was flat at 13,557.72.
In European equities on Friday, the CAC 40 in Paris was marginally lower, while the DAX 40 in Frankfurt was down 0.2%.
A spike in yields prompted a sell-off on Thursday. The latest batch of US Federal Reserve meeting minutes were demonstrably hawkish, sending Treasury yields higher on Thursday. Gilt yields also stretched as investors price in a higher terminal benchmark interest rate in the UK.
In the US on Thursday, Wall Street ended in the red, with the Dow Jones Industrial Average down 1.1%, the S&P 500 down 0.8% and the Nasdaq Composite down 0.8%.
On Thursday, numbers from payroll processor ADP showed US private sector employment grew by almost half a million jobs. Employment grew by 497,000 in June, rising from 278,000 in May.
Nonfarm payrolls data is released at 1330 BST on Friday. Numbers are expected to show that employment growth slowed to 225,000 last month, from 339,000 in May.
The dollar was weaker in early exchanges in Europe.
Sterling was quoted at $1.2736 early Friday, firming from $1.2690 at the London equities close on Thursday. The euro traded at $1.0884, higher than $1.0858. Against the yen, the dollar was quoted at JP¥143.43, down versus JP¥144.23.
In the UK, Halifax data showed that house prices fell for the third consecutive month.
The bank’s house price index fell 0.1% month-on-month in June, having fallen 0.2% in May. Prices in May were initially reported as registering no monthly change. In June, the typical UK property cost £285,932, down by around £300 from the month before.
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On an annual basis, prices fell 2.6% in June, accelerating from a 1.1% fall in May.
In London, Coca-Cola HBC was the top large-cap performer, up 3.8%.
After a stronger-than-expected finish to the first half of the year, the drinks bottler upgraded its earnings expectations for the full year.
The company now expects organic earnings before interest and tax growth of between 9% to 12% for 2023. Previously, Coca-Cola HBC had expected Ebit growth of up to 3% or a decline of up to 3%.
JD Sports Fashion edged up 0.5% after announcing its intention to acquire the remaining 50% of Iberian Sports Retail Group that it does not already own for €500.1 million.
Iberian Sports Retail operates more than 460 stores across Europe including JD in Iberia, Sprinter in Spain, Sport Zone in Portugal and Aktiesport and Perry Sport in the Netherlands.
In the FTSE 250, CMC Markets rose 1.8% following news that Chief Financial Officer Euan Marshall has resigned to take up the position of CFO at fellow midcap listing IntegraFin.
Marshall has been CFO of CMC Markets since 2019. IntegraFin was down 0.2%.
At the other end of the midcaps was OSB Group, down 13%.
Late Thursday, the mortgage specialist warned it expects an adverse EIR adjustment of around £160 million to £180 million on an underlying basis in the first half of 2023.
This is the result of ‘a reduction in the expected time spent on the reversion rate by Precise Mortgages customers’, OSB said.
On AIM, Aptamer jumped 18%.
The custom affinity binder developer announced contract wins for up to £507,00 over the next six months. Its shares had come under selling pressure on Tuesday after it warned it was running low on cash, and expected a double-digit percentage decline in revenue in its recently-concluded financial year.
‘In addition to trading income, further funding will be required in the short-term in order to continue as a going concern,’ the firm reiterated. Its stock is still down 26% this week.
Gold was quoted at $1,913.32 an ounce early Friday, higher than $1,909.01 on Thursday.
Brent oil was trading at $76.82 a barrel, higher than $75.23.
In Asia on Friday, the Nikkei 225 index in Tokyo closed down 1.2%. In China, the Shanghai Composite closed down 0.3%, while the Hang Seng index in Hong Kong was down 0.9% in late dealings. The S&P/ASX 200 in Sydney closed down 1.7%.
US Treasury Secretary Janet Yellen said Friday that a decoupling of the US and Chinese economies would be ‘virtually impossible’ and would destabilise global markets, in comments made while on a visit to Beijing packed with talks with officials and businesses.
Yellen’s four-day trip is her first to China as Treasury chief, and she is the second high-ranking US official to visit recently after Secretary of State Antony Blinken last month.
The US has in recent months said it is seeking to ‘de-risk’ from China by limiting the world’s second-largest economy’s access to advanced technology deemed crucial to Washington’s national security.
Yellen on Friday stressed that Washington was not seeking a ‘wholesale separation of our economies’.
‘We seek to diversify, not to decouple.’
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