London open: Stocks edge down ahead of payrolls

(Sharecast News) - London stocks were a little lower in early trade on Friday, unable to hold on to opening gains as nervousness crept in ahead of the latest US non-farm payrolls report. At 0820 GMT, the FTSE 100 was down 0.2% at 7,680.89.

Stocks in the US closed higher after Federal Reserve chair Jerome Powell signalled in remarks to the Senate Banking Committee that interest rates may be cut soon.

Responding to a question about rates and inflation, he said: "We're waiting to become more confident that inflation is moving sustainably at 2%. When we do get that confidence, and we're not far from it, it'll be appropriate to begin to dial back the level of restriction."

Looking ahead to the rest of the day, the focus will shift to the payrolls report, unemployment rate and average earnings, all due at 1330 GMT.

Richard Hunter, head of markets at Interactive Investor, said: "With little to upset the applecart, US markets powered to new record highs as peak optimism continued to drive buying interest.

"Investors have been reassured over recent days following Federal Reserve Chair Powell's comments to lawmakers, which have contained no negative surprises. Most pertinently, the Fed stands prepared to reduce interest rates this year when circumstances dictate, and implied that such a move is not far away, even though there is no immediate rush to ease monetary policy in light of consistently favourable economic data.

"Indeed, the relatively benign backdrop will be put to the test again today with the release of the non-farm payrolls report. Investors will be hoping to see employment beginning to slow, while remaining solid, while also keeping an eye on wage growth which itself is inflationary. The data is expected to show that 200,000 jobs were added in February, following the previous month's blowout number of 353,000, while unemployment is likely to remain unchanged at 3.7%."

In equity markets, there was more deal news for investors to sink their teeth into after packaging firm Mondi agreed to buy smaller rival DS Smith for £5.1bn. In a joint statement, the companies said that the agreement in principle has an implied value of 373p per DS Smith share, which is a premium of 33% to the closing share price on Thursday.

DS Smith was firmly in the black but Mondi shares were trading lower.

Informa was the top gainer on the FTSE 100 as it upped 2024 guidance after strong growth in overseas markets boosted full-year revenues and profits.

The specialist B2B events organiser and publisher saw revenues jump 41% in the year to December end to £3.19bn, while adjusted operating profit was £853.8m, compared to £496.3m a year previously. Pre-tax profits surged £492.1m from £168.8m.

Mike Ashley's Frasers Group lost ground as it confirmed the closure of Matchesfashion after just two months of ownership.

Currys was also a little weaker after it said Greek regulators had approved the sale of its Greece and Cyprus retail business Kotsovolos to Public Power Corporation for an enterprise value of €200m (£175m). The UK electrical retailer said it expected to get around £156m net from the deal and use the cash to pay down debt.

In broker note action, PZ Cussons slumped after Barclays downgraded shares of the Imperial Leather maker to 'equalweight' from 'overweight'. However, Irn-Bru maker AG Barr fizzed higher after an upgrade to 'equalweight' from 'underweight' by the same outfit.

Outside the FTSE 350, Petrofac surged after it was awarded a $200m, three-year operations contract from Turkemengas at the Galkynysh Gas Field, in Turkmenistan.

Market Movers

FTSE 100 (UKX) 7,680.89 -0.15% FTSE 250 (MCX) 19,572.62 -0.06% techMARK (TASX) 4,535.70 -0.07%

FTSE 100 - Risers

Informa (INF) 821.40p 1.96% Rightmove (RMV) 572.00p 1.06% Flutter Entertainment (DI) (FLTR) 17,300.00p 1.05% F&C Investment Trust (FCIT) 990.00p 0.71% Ashtead Group (AHT) 5,162.00p 0.70% Convatec Group (CTEC) 277.40p 0.65% Coca-Cola HBC AG (CDI) (CCH) 2,486.00p 0.61% Smurfit Kappa Group (CDI) (SKG) 3,316.00p 0.61% Burberry Group (BRBY) 1,264.00p 0.60% Reckitt Benckiser Group (RKT) 5,114.00p 0.59%

FTSE 100 - Fallers

Spirax-Sarco Engineering (SPX) 10,350.00p -2.91% Mondi (MNDI) 1,346.00p -2.46% Barclays (BARC) 170.00p -1.77% Admiral Group (ADM) 2,568.00p -1.68% Rentokil Initial (RTO) 496.30p -1.57% Centrica (CNA) 131.45p -1.13% GSK (GSK) 1,692.00p -1.12% Rio Tinto (RIO) 4,929.50p -0.92% Vodafone Group (VOD) 69.20p -0.83% Hikma Pharmaceuticals (HIK) 1,842.00p -0.65%

FTSE 250 - Risers

Darktrace (DARK) 387.20p 3.61% Pets at Home Group (PETS) 288.80p 3.44% C&C Group (CDI) (CCR) 148.80p 1.92% Hammerson (HMSO) 25.80p 1.82% Energean (ENOG) 1,053.00p 1.74% Mobico Group (MCG) 78.20p 1.49% Quilter (QLT) 98.80p 1.39% International Distributions Services (IDS) 246.00p 1.36% Safestore Holdings (SAFE) 769.50p 1.32% Grafton Group Ut (CDI) (GFTU) 979.70p 1.11%

FTSE 250 - Fallers

Bytes Technology Group (BYIT) 567.00p -2.49% Ibstock (IBST) 148.00p -2.25% Bodycote (BOY) 614.50p -2.23% Dr. Martens (DOCS) 89.00p -2.09% Close Brothers Group (CBG) 381.80p -2.05% Coats Group (COA) 75.00p -1.83% Wizz Air Holdings (WIZZ) 2,278.00p -1.60% SDCL Energy Efficiency Income Trust (SEIT) 64.00p -1.54% Kainos Group (KNOS) 1,074.00p -1.47% Virgin Money UK (VMUK) 212.10p -1.21%