London midday: Stocks fall further ahead of US payrolls
By Michele Maatouk
Date: Friday 06 May 2022
(Sharecast News) - London stocks had fallen further into the red by midday on Friday amid concerns about surging inflation and rate hikes, as investors eyed the latest US non-farm payrolls release.
The FTSE 100 was down 0.7% at 7,449.51.
Oanda analyst Jeffrey Halley said: "Market expectations are for around 400,000 jobs to be added, roughly the same as March, with unemployment edging lower to 3.50%. A sharp divergence, up or down, from the median forecast, should produce a very binary outcome given the schizophrenic nature of the short-term financial markets at the moment.
"A print north of 500,000 should provoke a faster tightening by the Fed possible recession equals selling equities, bonds, gold, cryptos, DM and EM FX, buy US dollars reaction.
"Conversely, a print under 300,000 should see a sigh of relief less Fed tightening rally. Buy equities, bonds, gold, cryptos, DM and EM currencies and sell US dollars. It's that sort of market."
On home shores, a survey out earlier showed that construction sector growth slowed in April as rising costs and economic uncertainty dented demand.
The S&P Global/CIPS construction purchasing managers' index fell to 58.2 from 59.1 in March, marking the worst rate of growth since January but coming in above expectations for a reading of 58.0. A reading above 50.0 indicates expansion, while a reading below signals contraction.
The fastest-growing construction segment remained commercial work, with the index at 60.5, followed by civil engineering at 56.2. Construction firms highlighted pent-up demand for commercial projects and spending related to Covid 19 recovery plans.
Meanwhile, major infrastructure schemes such as HS2 were cited as factors underpinning civil engineering activity.
Residential work remained the worst-performing sub-sector, with the index falling 53.8 in April from 54.9 in March.
The survey revealed the slowest new order growth so far in 2022, with the index declined to 56.8 in April from 58.9 the month before.
Tim Moore, economics director at S&P Global, said: "The construction sector is moving towards a more subdued recovery phase as sharply rising energy and raw material costs hit client budgets. House building saw the greatest loss of momentum in April, with the latest expansion in activity the weakest since September 2021. Commercial and civil engineering work were the most resilient segments, supported by COVID-19 recovery spending and major infrastructure projects respectively.
"Construction companies have built up strong order books since the reopening of the UK economy, which led to another round of rising employment in April and these project starts should keep the sector in expansion mode during the remainder of the second quarter.
"However, tender opportunities were less plentiful in April as rising inflation and higher borrowing costs started to bite. Consequently, longer-term growth projections have slumped from January's peak, with business optimism now the weakest since September 2020."
In equity markets, BA and Iberia owner IAG slid after it said it expected to turn profitable from the second quarter as it reported narrower losses in the first three months of the year but that it was planning to scale back its summer ramp up.
InterContinental Hotels was in the red even as it reported a 61% jump in first-quarter group revenue per available room on the year and said it had attained 82% of 2019's level.
Promotional merchandise distributor 4imprint rallied after saying it expects annual operating profit to be above forecasts as revenue is on track to hit a better-than-expected £1bn.
Insurer Beazley was trading up as it said that 2022 had "started well", with both gross premiums written and premium rates on renewal business increasing in the first quarter.
Outside the FTSE 350, shares of convenience store chain McColl's reversed earlier heavy losses to trade up nearly 80% following a Sky News report that supermarket chain Morrisons has proposed a last-ditch rescue deal for the group that would preserve the majority of its 16,000-strong workforce.
Market Movers
FTSE 100 (UKX) 7,449.51 -0.72%
FTSE 250 (MCX) 19,893.42 -0.98%
techMARK (TASX) 4,322.00 -1.04%
FTSE 100 - Risers
Mondi (MNDI) 1,599.00p 2.07%
Admiral Group (ADM) 2,368.00p 2.02%
BP (BP.) 426.90p 1.91%
Avast (AVST) 530.00p 1.30%
Spirax-Sarco Engineering (SPX) 11,700.00p 1.30%
Endeavour Mining (EDV) 2,046.00p 1.19%
BAE Systems (BA.) 768.60p 1.13%
CRH (CDI) (CRH) 3,205.00p 0.98%
Pearson (PSON) 774.20p 0.75%
Associated British Foods (ABF) 1,611.00p 0.69%
FTSE 100 - Fallers
International Consolidated Airlines Group SA (CDI) (IAG) 131.84p -8.01%
SEGRO (SGRO) 1,130.00p -4.84%
Rightmove (RMV) 576.80p -4.57%
Aveva Group (AVV) 2,192.00p -4.45%
Croda International (CRDA) 7,152.00p -4.26%
Ocado Group (OCDO) 796.20p -4.07%
Auto Trader Group (AUTO) 596.60p -3.12%
Rolls-Royce Holdings (RR.) 79.24p -3.06%
Entain (ENT) 1,363.50p -2.99%
Intertek Group (ITRK) 5,008.00p -2.98%
FTSE 250 - Risers
4Imprint Group (FOUR) 2,880.00p 18.03%
Beazley (BEZ) 427.80p 5.27%
Hiscox Limited (DI) (HSX) 918.00p 4.91%
Lancashire Holdings Limited (LRE) 399.20p 2.20%
Sequoia Economic Infrastructure Income Fund Limited (SEQI) 98.70p 2.07%
Johnson Matthey (JMAT) 2,311.00p 1.76%
Morgan Advanced Materials (MGAM) 293.50p 1.56%
Capital & Counties Properties (CAPC) 163.20p 1.49%
TI Fluid Systems (TIFS) 161.40p 1.38%
Diversified Energy Company (DEC) 124.10p 1.31%
FTSE 250 - Fallers
Ferrexpo (FXPO) 152.00p -5.88%
Watches of Switzerland Group (WOSG) 858.00p -5.51%
Diploma (DPLM) 2,602.00p -4.55%
Darktrace (DARK) 418.50p -4.30%
Baillie Gifford US Growth Trust (USA) 181.40p -4.22%
PureTech Health (PRTC) 170.20p -4.06%
XP Power Ltd. (DI) (XPP) 3,035.00p -3.96%
Workspace Group (WKP) 617.50p -3.89%
888 Holdings (888) 179.40p -3.86%
Urban Logistics Reit (SHED) 168.50p -3.71%
Email this article to a friend
or share it with one of these popular networks:
You are here: news
10 Lower Thames St,
London EC3R 6EN