London close: Shares rise on 'Bleak Friday' for households
London stocks finished in the green on Friday, as investors digested a US non-farm payrolls report that fell short of forecasts, as well as an earlier reading on the UK manufacturing sector.
The FTSE 100 ended the session up 0.3% at 7,537.90, and the FTSE 250 was ahead 0.27% at 21,218.01.
“There are days when markets seem to be seriously disconnected from the current economic climate,” said AJ Bell financial analyst Danni Hewson.
“Today, as households grappled with a ‘Bleak Friday’ - that unfortunately is no laughing matter - a number of UK retailers enjoyed a surprising rally.
“Moonpig, Curry’s, JD Sports and Next were among the day’s climbers, along with Sports Direct owner Frasers Group, which unveiled a new buyback programme that will run to the end of the retailer’s financial year.”
Hewson noted good news from Quiz as well, which sent its shares popping more than 44%.
The fashion chain was expecting to report its first profit in three years, after the return of ‘events’ which require “selfie-worthy frocks”, Hewson quipped.
“But there will be many feeling slightly bewildered by today’s moves.
“Past performance is no guarantee of future profitability, and with households having to find an extra £700 a year to pay for their energy costs, there are big questions about how much consumer cash will be left to fill retailers’ coffers.”
Across the pond, the US economy added 431,000 payrolls in March according to the Bureau of Labor Statistics - down from the previous month's print of 750,000 and falling short of market expectations for a print of 490,000.
Job gains continued in leisure and hospitality, up 112,000; professional and business services, 102,000 higher; retail trade, 49,000 stronger; and food and beverage stores and manufacturing, up 18,000 and 38,000, respectively.
Figures for February were revised sharply higher to show a 750,000 gain, up from 678,000, while the change in total nonfarm payroll employment for January was also revised up by 23,000 to 504,000.
Overall, job growth averaged 562,000 per month in the first quarter of 2022, the same as the average monthly gain for 2021, as a sharp decline in Covid-19 infections and the lift of restrictions, coupled with strong consumer demand, kept labour demand high.
However, employment was still down 1.6 million, or 1%, from its pre-pandemic levels in February 2020.
Elsewhere, it was reported that the UK would join the US in releasing more oil from its reserves, as part of a joint effort to lower prices and reduce reliance on Russian supplies.
According to Bloomberg, an announcement was set to be made via the International Energy Agency.
Sources declined to say the size of the release, citing market sensitivity and the need for countries to act in concert.
US president Joe Biden said on Thursday that his plans to release one million barrels of oil each day for six months would lay the foundations for the US to achieve energy independence from foreign suppliers.
He also said that he expected allies to release as many as 50 million barrels from their own stocks.
On the economic front, UK manufacturing growth hit a 13-month low in March, while business optimism fell to a 14-month low.
The S&P Global/CIPS manufacturing purchasing managers’ index fell to 55.2 from 58.0 in February.
That was below the flash estimate of 55.5, but still above the 50.0 mark that separates contraction from expansion.
Ongoing supply shortages, greater caution among clients, escalating inflationary pressures and geopolitical tensions all hampered the upturn, the survey found.
All five of the PMI sub-components were down, with weaker growth of output and new orders, slower upturns in both stocks of purchases and employment and a lessening in the extent to which average supplier lead times were lengthening.
“March saw a marked growth slowdown in the UK manufacturing sector, with rates of expansion for production and new orders both easing and new export business suffering back-to-back declines,” said Rob Dobson, director at S&P Global.
“The slowdown in consumer goods output was especially marked.
“Manufacturers are being hit by several headwinds simultaneously, as supply shortages, greater caution among clients, escalating inflationary pressures, ongoing Brexit factors and rising geopolitical tensions all hamper the upturn.”
In equity markets, Taylor Wimpey gave up most of its earlier gains to finish up 0.42%, while Persimmon dipped below the waterline by the close to end the day 0.14% weaker.
Both were strongly higher earlier in the session, recovering after the housebuilding sector took a beating in the last quarter.
Elsewhere, Bridgepoint Group was up 3.84% and Lancashire Holdings was boosted 2.27%, both lifted by an upgrade to ‘buy’ at Citi.
Close Brothers Group was ahead 1.51% after an upgrade to ‘buy’ from ‘hold’ at Liberum.
Consumer goods giant Reckitt Benckiser was 3.05% firmer after Barclays lifted its price target to 9,100p from 8,800p.
High street stalwart Next was up 1.26% following losses in the previous session, on the back of a note by Deutsche Bank and read-across from disappointing first-quarter results from Swedish competitor H&M.
Miners Anglo American, Rio Tinto and Glencore were also on the front foot, rising 2.44%, 2.37% and 1.52%, respectively.
Mitie gained 0.73% after the outsourcer announced the acquisition of P2ML, a specialist telecoms tower design company, for £2.1m.
On the downside, electronic products supplier Electrocomponents lost 3.32%, and caterer Compass Group was 3.27% lower.
Subprime lender Provident Financial was 4.04% weaker, having rallied on Thursday after it reinstated its dividend and said it returned to annual profit after bad debt provisions fell.
Market Movers
FTSE 100 (UKX) 7,537.90 0.30%
FTSE 250 (MCX) 21,218.01 0.27%
techMARK (TASX) 4,325.15 -0.08%
FTSE 100 - Risers
Reckitt Benckiser Group (RKT) 6,010.00p 3.05%
Anglo American (AAL) 4,069.50p 2.44%
Rio Tinto (RIO) 6,225.00p 2.37%
Sage Group (SGE) 717.80p 2.37%
Howden Joinery Group (HWDN) 781.00p 1.72%
JD Sports Fashion (JD.) 150.80p 1.69%
Unilever (ULVR) 3,508.00p 1.53%
Glencore (GLEN) 507.60p 1.52%
London Stock Exchange Group (LSEG) 8,062.00p 1.48%
Airtel Africa (AAF) 141.40p 1.43%
FTSE 100 - Fallers
Electrocomponents (ECM) 1,044.00p -3.32%
Compass Group (CPG) 1,596.00p -3.27%
Hargreaves Lansdown (HL.) 985.20p -2.26%
Ferguson (FERG) 10,155.00p -1.93%
Coca-Cola HBC AG (CDI) (CCH) 1,574.50p -1.88%
Rolls-Royce Holdings (RR.) 99.37p -1.71%
Aviva (AV.) 444.60p -1.66%
Flutter Entertainment (CDI) (FLTR) 8,726.00p -1.51%
Sainsbury (J) (SBRY) 248.90p -1.50%
Experian (EXPN) 2,918.00p -1.36%
FTSE 250 - Risers
888 Holdings (888) 194.20p 5.26%
Moonpig Group (MOON) 234.80p 4.82%
Ferrexpo (FXPO) 195.30p 4.72%
Currys (CURY) 95.05p 4.57%
Energean (ENOG) 1,244.00p 4.45%
Baltic Classifieds Group (BCG) 144.40p 4.26%
Bridgepoint Group (Reg S) (BPT) 365.00p 3.84%
Helios Towers (HTWS) 119.80p 3.81%
Fidelity China Special Situations (FCSS) 258.50p 3.57%
Frasers Group (FRAS) 654.50p 3.47%
FTSE 250 - Fallers
Oxford Biomedica (OXB) 644.00p -4.45%
Provident Financial (PFG) 294.20p -4.04%
Ascential (ASCL) 336.00p -3.06%
Hammerson (HMSO) 32.10p -2.79%
Spectris (SXS) 2,539.00p -2.62%
Centrica (CNA) 78.36p -2.15%
Volution Group (FAN) 410.50p -2.15%
Allianz Technology Trust (ATT) 277.50p -2.12%
TUI AG Reg Shs (DI) (TUI) 237.20p -1.98%
Trustpilot Group (TRST) 143.10p -1.92%