London pre-open: Stocks to nudge down ahead of payrolls

(Sharecast News) - London stocks were set to nudge lower at the open on Friday following a downbeat session in Asia and as investors eyed the release of the latest US non-farm payrolls report. The FTSE 100 was called to open down around six points.

On the macro front, there are no major UK data releases due, but in the US the non-farm payrolls report for November is scheduled for release at 1330 GMT, along with the unemployment rate and average earnings.

Kathleeen Brooks, research director at XTB, said: "The December payrolls report is expected to show a sharp reduction in jobs growth at the end of 2024. Analysts are expecting a 165k increase in payrolls, this compares to a 227k increase for November. Private sector payrolls are also expected to moderate and grow by 140k, versus 194k in November. The unemployment rate is expected to remain steady at 4.2%, the highest level since August, and average hourly earnings are expected to stay at a 4% annual rate.

"Although jobs growth is expected to moderate, there are still pockets of strength in the labour market that could be inflationary. This is why the average earnings data is also a vital piece of information for this report. Monthly average hourly earnings data has been trending higher in recent months, compared with earlier in 2024. Although annual wage growth has been stable, the monthly figure could suggest that there is upward pressure brewing for wage inflation down the line.

"A moderation in jobs growth, yet elevated monthly inflation growth could make this report hard to decipher. On the one hand a softening labour market supports further easing from the Federal Reserve, on the other hand, stronger wage growth supports a high bar for future cuts."

In UK corporate news, supermarket chain Sainsbury's posted a 3.8% rise in sales over the Christmas period and said it expected to deliver full-year underlying retail operating profit at the mid-point of its £1.01bn - £1.06bn guidance range, representing growth of around 7%.

Party food sales were up nearly 40% in the six weeks to 4 January, with more than 200 bottles of fizz sold every minute in the key days ahead of Christmas, the company said in a trading statement.

Vodafone said it has raised its stake in its Indian joint venture Vodafone Idea (Vi) after exiting its investment in the country's mobile tower installation company Indus Towers.

The company said it had sold its remaining 3% shareholding in Indus Towers for 28bn INR ($330m), with $105m used to repay outstanding borrowings secured against its Indian assets and the $225m used to acquire 1.7bn shares in Vi, raising its stake to 24.39% from 22.56%.

GSK said the US FDA has accepted its regulatory application for a new prefilled syringe presentation of Shingrix, its shingles vaccine, eliminating the need for reconstitution before administration.

The FTSE 100 pharmaceuticals firm said the new presentation contained the same composition as the existing vaccine and was supported by data demonstrating comparability.

It marked a significant milestone for Shingrix, which has been approved in the US since 2017 for adults over 50 and since 2021 for immunocompromised adults aged 18 and older.