|CATEGORY: MARKET REPORT - PRE-OPEN
Fri 06 Dec 2019
LONDON (SHARECAST) - (Sharecast News) - London stocks were set to edge higher at the open on Friday as investors awaited the release of the latest US non-farm payrolls report and continued to eye trade developments.
The FTSE 100 was called to open 14 points higher at 7,151.
CMC Markets analyst Michael Hewson said: "It's been rather a strange week for global equity markets, moving from an expectation that we could well see some movement on trade between the US and China in the next couple of weeks, to the prospect that any solution may well not happen until after the next Presidential election.
"As a result of these mixed signals investors appear to be taking a more cautious view as to what may happen next, and are likely to wait until after the 15th December, when the next set of US tariffs on Chinese goods are set to kick in.
"This caution translated into a European session that saw stocks finish broadly lower yesterday, and US markets managed to eke out a small gain after President Trump said that talks between the US and China on trade were progressing well. The problem now is there is less confidence that the President actually means what he says, when he comes out with comments like that.
"Today's European session is likely to be similarly cautious, opening slightly higher, with the main focus likely to be on the latest US payrolls report for November."
The payrolls report is due at 1330 GMT, along with the unemployment rate and average earnings. On home shores, Halifax house prices for November are out at 0830 GMT.
Hewson said the payrolls report should show a pickup in seasonal hiring, "as well as the adding back in of the GM strike numbers, as the US economy gears up for Thanksgiving and the pre-Christmas period, with expectations of a rise to 185k".
In corporate news, Phoenix Group Holdings said it had made a £3.2bn cash and shares offer for UK life insurance closed book consolidator ReAssure Group.
The acquisition was forecast to generate extra cash flows of around £7bn over time, of which £2.7bn was expected to be generated between 2020 and 2023 and a further £4.3bn from 2024 onwards, Phoenix said on Friday.
ReAssure is owned by Swiss Re Group and MS&AD Insurance Group Holdings.
Berkeley Group reported that interim profit before tax fell 31% to £276.7m as revenue dived 44% to £930.9m.
However, the property developer said the reduction had been anticipated and reflected the completion several London-based developments acquired in the period from 2009 to 2013.
The company added that it had been a "good start to the year", leaving it on course to achieve its six year pre-tax profit target of £3.3bn.
Associated British Foods reiterated its outlook early in the new financial year on Friday, with AB Sugar set to "benefit materially" from the increase seen in EU sugar prices and further cost reduction.
The FTSE 100 company's chairman, Michael McLintock, added that Primark was expected to continue the expansion of its selling space, and noted that its businesses had completed "all practical preparations" for Brexit.
He said the firm still expected progress, on both a reported and an IFRS 16 adjusted basis, in adjusted earnings per share for the group for this financial year.