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London open: Stocks bounce back, Brexit and US jobs data in the spotlight
Stocks were bouncing back on Friday ahead of a meeting between Prime Minister May and her French counterpart, Emmanuel Macron, scheduled for later in the day.
With just 11 weeks to go to the date by when negotiators on both sides want a deal to be signed, May is still trying to win EU leaders over to her vision for Brexit.
However, according to various reports Brussels was now prepared to compromise on post-Brexit arrangements for the Irish border, making a deal on the Withdrawal Bill before October more likely.
In a boost to investor sentiment, overnight saw another strong session for technology stocks in the US as Apple’s market capitalisation pushed past the $1.0trn mark.
Nevertheless, ongoing weakness in the Chinese yuan was reminding investors that a full-blown trade war might soon become a reality, with the US dollar gaining 0.46% versus the Chinese currency to 6.8746.
Against that backdrop, as of 0915 BST, the FTSE 100 was trading 41 points higher at 7,606.96, with the second tier index up by 0.27% or 55.26 points to 20,604.62.
Very much on investors’ minds as well was the US non-farm payrolls report for July which was set for release at 1330 BST, with the consensus anticipating an increase of 193,000, which should suffice to lower the unemployment rate from 4.0% to 3.9%.
Services sector Purchasing Managers Indices were also due to be published in the US and UK, with the latter expected at 0930 BST.
Earlier, IHS Markit said its Eurozone services PMI slipped from a prelreading of 55.2 for June to 54.2 in July (consensus: 54.4).
That prompted the survey compiler to say: “On this front, downside risks are more prevalent, as the slower expansion in new order inflows during July was partnered by a tandem dip in business optimism to a 20-month low. Both are reflecting the uncertainty about global market conditions, especially given the ongoing rhetoric about trade wars and the potential spillover effects to the broader economy and to manufacturing in particular.”
RBS announces first dividend in a decade
Royal Bank of Scotland declared its first dividend in 10 years despite a inconsistent set of first half results. The taxpayer-owned bank reported a profit attributable to shareholders of £888m for the first six months of the year, which was down 5.4% on last year. It said the interim dividend of 2p per ordinary share was subject to the timing of the penalty agreed with the US Department of Justice.
Product testing company Intertek said it was buying US-based software provider Alchemy for $480m (£368.8m) in cash. Founded in 2003 and headquartered in Austin, Texas, Alchemy employs approximately 270 people at four locations across the U.S. and Canada. It is majority owned by the private equity firm The Riverside Company. Intertek said it was buying on a cash and debt-free basis.
Cobham saw sales slump over the first half of the year as it ran into trouble with Boeing on the KC-46 tanker programme. But following divestments during the period, management argued that the resulting company was now more focused and the balance sheet stronger.
Paper manufacturer Mondi led the FTSE 100 as it reported a 6% rise in interim pre-tax profits of €490m (£436m) due to higher average selling prices and solid demand across its packaging businesses.
Plastics supplier Essentra was boosted as said returned to profit growth, unveiling a 7% rise in half-year pre-tax profits to £21m as revenue fell to £513.1m from £522.6m, but was unchanged on a like-for-like basis.
IAG flew lower as it issued its results for the six months ended 30 June on Friday, reporting second-quarter operating profit of €835m before exceptional items, up from a restated €790m a year ago but below consensus forecasts. The FTSE 100 owner of British Airways said it was still interested in low-cost rival Norwegian Air.
William Hill was a big faller reported a £819.6m loss before tax for the 26 weeks to 27 June, down from a £93.1m profit a year earlier. This included £882.8m non-cash impairment taken as a result of the government’s triennial review into FOBTs and also £29.9m of exceptional costs relating to restructuring, which is expected to see further costs of around £15m in the second half.
AstraZeneca and Merck said the European Medicines Agency (EMA) has granted orphan designation to selumetinib, a MEK 1/2 inhibitor, for the treatment of neurofibromatosis type 1 (NF1) an incurable genetic condition that affects one in 3,000 newborns worldwide.
