London close: Stocks mixed after forecast-beating US payrolls report
London stocks finished in a mixed state on Friday, as traders spent the afternoon digesting a payrolls report out of the United States which saw growth ahead of expectations.
The FTSE 100 ended the session up 0.04% at 7,122.95, while the FTSE 250 closed 0.21% weaker at 23,456.16.
It was a mixed picture for sterling as well, with the currency last trading 0.45% weaker against the dollar at $1.3869, while it gained 0.18% on the euro to €1.1793.
“An overwhelmingly positive US jobs report has provided markets with a fresh boost today, driving the S&P 500 into a record high,” said IG senior market analyst Joshua Mahony.
“With economic data taking a turn for the better, we have seen treasury yields reverse higher to the benefit of value stocks.”
Mahony said declines in the Nasdaq highlighted the shifting of funds away from growth stocks and towards recovery plays, as the 10-year US Treasury yield pushed upwards.
“Next week brings expectations of a dramatic 22.5% year-on-year reading for UK second quarter growth, with the theme of economic outperformance likely to bring further upside for the FTSE 250.”
According to the Department of Labor, non-farm payrolls increased by 943,000 in July, following an upwardly revised 938,000 person gain in June.
Economists had pencilled in a rise of 870,000 after the preliminary estimate of a 850,000 person increase in June.
Leisure and hospitality registered the biggest increase in hiring, increasing by 380,000, followed by a 261,000 jump in public and private education employment.
Andrew Hunter at Capital Economics said that after Friday's jobs report the risk to an earlier start to the Fed tapering its asset purchases.
Hunter had previously anticipated that the Fed would hold off until early 2022.
Hinish Patel, portfolio manager at Quilter Investors, was more cautious, telling clients that the Delta variant meant that the July non-farm payrolls numbers might mark a bit of a highpoint in jobs growth for some time.
Delta had also revealed just how vulnerable the global economy was to new strains - and then there was the problem of increasing automation.
"But for now, the Fed will be hoping everyone returns to work and offices in September once the Delta surge has eased off, confidence resumes and vaccination rates improve," Patel said.
On home shores, annual house price growth eased in July, hitting its lowest level since March amid signs of a "cooling market" as the stamp duty holiday ended, according to the latest survey from Halifax.
House prices rose 7.6% on the year, down from 8.7% growth in June.
On the month, however, prices ticked up 0.4% in July to £261,221, having fallen 0.6% the month before.
Russell Galley, managing director at Halifax, said the annual easing was somewhat expected given the strength of price inflation seen last summer, as the market began its recovery from the first lockdown, and with activity supported by the start of the stamp duty holiday.
The stamp duty holiday, introduced by Chancellor Rishi Sunak last July to bolster the housing market, ended at the end of June, after being extended from 31 March.
It meant that no tax needed to be paid on the first £500,000 of property purchases in England and Northern Ireland.
“Recent months have been characterised by historically high volumes of buyer activity, with June the busiest month for mortgage completions since 2008,” Galley said.
“This has been fuelled both by the ‘race for space’ and the time-limited stamp duty break.”
Visits to UK stores flatlined, meanwhile, at a level far below pre-pandemic trends in July as Covid-19 restrictions were lifted.
Retail footfall fell 0.4% percentage point from June and was 28% less than two years earlier, figures from the British Retail Consortium and Sensormatic IQ showed.
The biggest decline was at retail parks where visits dropped 6.9 points from June and 15% from two years earlier.
High streets had a 1.2-point month-on-month fall and at shopping centres footfall was down 2.6 points.
Finally, it was revealed that Britons would face soaring energy prices from October after energy regulator Ofgem said it was lifting the cap on default tariffs by 12-13% just as the colder months approach.
The move meant the average dual fuel bill will climb to £1,277 from £1,138 for the 11 million households paying by direct debit, up by £139.
For another four million homes using prepayment meters the average energy bill will climb by £153 to £1,309.
The cap rise comes on top of a £96-a-year increase to the price cap announced six months ago that came into effect from April.
In equity markets, Wm Morrison rallied 2.5% after it agreed to a raised takeover offer of £6.7bn from a consortium led by Fortress Group.
London Stock Exchange Group leapt 5.03% after it more than doubled profits in the first half the year as total income grew 4.6%.
The company said adjusted pre-tax profits came in at £1.03bn from £435m a year ago.
Adjusted operating expenses grew 1.1% and £77m in synergies had been achieved from the acquisition of Refinitiv.
Cairn Energy advanced 6.12% as it edged closer to receiving $1.7bn in compensation as part of a long-running tax dispute with the Indian government.
On the downside, Hikma Pharmaceuticals fell 7.08% even after upgrading the full-year outlook for its generics arm and reporting a rise in first-half profit and revenue.
The company hailed a strong performance in both the generics and branded segments, and resilience in the injectables business.
Market Movers
FTSE 100 (UKX) 7,122.95 0.04%
FTSE 250 (MCX) 23,456.16 -0.21%
techMARK (TASX) 4,618.23 -0.40%
FTSE 100 - Risers
London Stock Exchange Group (LSEG) 7,872.00p 5.03%
Flutter Entertainment (CDI) (FLTR) 12,720.00p 2.91%
Prudential (PRU) 1,426.50p 2.66%
NATWEST GROUP PLC ORD 100P (NWG) 215.70p 2.23%
Evraz (EVR) 613.60p 2.10%
Aviva (AV.) 399.70p 1.94%
Taylor Wimpey (TW.) 175.10p 1.92%
Legal & General Group (LGEN) 276.40p 1.80%
Standard Chartered (STAN) 459.20p 1.77%
HSBC Holdings (HSBA) 409.85p 1.72%
FTSE 100 - Fallers
Hikma Pharmaceuticals (HIK) 2,455.00p -7.08%
Experian (EXPN) 3,099.00p -3.97%
Coca-Cola HBC AG (CDI) (CCH) 2,693.00p -3.06%
Mondi (MNDI) 2,008.00p -3.00%
Fresnillo (FRES) 795.20p -2.65%
International Consolidated Airlines Group SA (CDI) (IAG) 173.44p -2.56%
Kingfisher (KGF) 361.10p -2.38%
Polymetal International (POLY) 1,512.00p -2.36%
AstraZeneca (AZN) 8,157.00p -2.22%
Rentokil Initial (RTO) 554.60p -2.12%
FTSE 250 - Risers
Capita (CPI) 40.06p 11.31%
Vectura Group (VEC) 164.00p 6.49%
Cairn Energy (CNE) 168.20p 6.12%
Chrysalis Investments Limited NPV (CHRY) 261.00p 4.84%
Countryside Properties (CSP) 538.00p 3.46%
Airtel Africa (AAF) 91.25p 2.82%
Watches of Switzerland Group (WOSG) 1,002.00p 2.77%
Morrison (Wm) Supermarkets (MRW) 278.80p 2.50%
Hammerson (HMSO) 36.60p 2.49%
Auction Technology Group (ATG) 1,380.00p 2.37%
FTSE 250 - Fallers
Frasers Group (FRAS) 588.50p -4.32%
Savills (SVS) 1,200.00p -4.00%
CMC Markets (CMCX) 419.00p -3.48%
Reach (RCH) 397.50p -3.28%
Petropavlovsk (POG) 20.48p -3.03%
Hilton Food Group (HFG) 1,102.00p -3.02%
Restaurant Group (RTN) 117.00p -2.66%
Mitchells & Butlers (MAB) 275.80p -2.61%
Baillie Gifford US Growth Trust (USA) 344.50p -2.55%
National Express Group (NEX) 269.20p -2.53%