London open: Stocks fall ahead of payrolls report
London stocks fell in early trade on Friday as investors mulled over Chinese services data and looked ahead to the release of the latest US non-farm payrolls report, amid ongoing concerns about the escalating coronavirus pandemic.
At 0830 GMT, the FTSE 100 was down 0.9% at 5,432.70, with all eyes on the payrolls report, due at 1330 BST, along with the unemployment rate and average earnings, after figures released on Thursday revealed that US initial jobless claims surged by 6.6 million last week due to the coronavirus outbreak.
London Capital Group analyst Jasper Lawler said: "Global coronavirus cases have topped one million and there is an unwillingness to hold market positions through the weekend for fear of more bad news.
"We’re waiting for the data to confirm what we already know. The record one hundred-month plus stretch of jobs growth in the US has come to screeching halt. The non-farm payroll figure for March is expected to turn negative. Because the data was collected in the first half of the month, its unlikely to capture the full damage from forced lockdowns and stay home advice. The really hideous stuff will probably show up in the April numbers."
Investors were also digesting the latest services data out of China, which showed the sector remained in contraction territory.
The Caixin/Markit services purchasing managers’ index rose to 43 in March from a record low of 26.5 the month before and ahead of expectations for a reading of 39.0. However, it was still well below the 50.0 mark that separates contraction from expansion and marked the weakest reading since the survey began in 2005.
Pantheon Macroeconomics said: "This is a very disappointing result, even though the headline bounce surpassed expectations. China’s other PMIs this week, including the services sub-index under the official non-manufacturing gauge, saw plus-50 prints, indicating that business conditions improved in March after a month of effectively no activity.
"Today’s reading suggests that conditions worsened from the eye of the country’s Covid-19 storm, albeit to a lesser extent than in February."
In corporate news, defence company BAE Systems was in the red as it withdrew its dividend and put financial guidance on hold after the Covid-19 crisis began to cause major disruptions to its business.
Primark owner Associated British Foods lost ground after saying that its chief executive and finance director had volunteered to take a 50% pay cut as full-year earnings are now expected to be "much lower" than envisaged at the start of the financial year due to Covid-19.
Ascential slid after pulling its final 4p dividend and cancelling the Cannes Lions advertising conference in response to the pandemic. The company also froze executive pay rises and imposed a temporary 25% board room pay cut.
OneSavings Bank was a little weaker after scrapping its final dividend as it looks to weather the pandemic.
On the upside, Stagecoach rose as it said it would furlough more than half of its regional bus employees after sales plunged to 15% of normal levels in the coronavirus crisis.
FTSE 100 - Risers
Coca-Cola HBC AG (CDI) (CCH) 1,742.50p 4.22%
International Consolidated Airlines Group SA (CDI) (IAG) 207.10p 3.55%
Burberry Group (BRBY) 1,280.00p 2.56%
Melrose Industries (MRO) 76.00p 2.21%
London Stock Exchange Group (LSE) 6,880.00p 2.14%
Sage Group (SGE) 563.80p 1.92%
Bunzl (BNZL) 1,524.00p 1.26%
AstraZeneca (AZN) 7,064.00p 1.20%
Relx plc (REL) 1,656.50p 1.13%
Smith & Nephew (SN.) 1,358.00p 1.00%
FTSE 100 - Fallers
Legal & General Group (LGEN) 166.40p -6.28%
Centrica (CNA) 31.83p -6.16%
Phoenix Group Holdings (PHNX) 554.00p -3.82%
Whitbread (WTB) 2,607.00p -3.73%
Fresnillo (FRES) 653.00p -3.66%
Aviva (AV.) 241.20p -3.40%
Land Securities Group (LAND) 519.60p -3.35%
Prudential (PRU) 911.80p -3.27%
3i Group (III) 692.40p -3.08%
Intermediate Capital Group (ICP) 792.50p -3.06%
FTSE 250 - Risers
Cairn Energy (CNE) 93.60p 6.36%
National Express Group (NEX) 187.90p 5.62%
FirstGroup (FGP) 50.00p 5.26%
IP Group (IPO) 45.15p 4.63%
Stagecoach Group (SGC) 69.35p 4.52%
WH Smith (SMWH) 1,027.00p 4.32%
PPHE Hotel Group Ltd (PPH) 1,045.00p 3.98%
Hyve Group (HYVE) 18.40p 3.95%
GVC Holdings (GVC) 462.60p 2.80%
XP Power Ltd. (DI) (XPP) 2,580.00p 2.79%
FTSE 250 - Fallers
Ascential (ASCL) 194.10p -13.50%
Cineworld Group (CINE) 36.51p -5.59%
Hammerson (HMSO) 68.44p -4.94%
Morgan Sindall Group (MGNS) 1,078.00p -4.77%
Vistry Group (VTY) 533.00p -4.48%
Crest Nicholson Holdings (CRST) 177.60p -4.46%
SSP Group (SSPG) 259.20p -4.00%
Hochschild Mining (HOC) 107.70p -3.93%
Watches of Switzerland Group (WOSG) 183.20p -3.88%
Dixons Carphone (DC.) 68.85p -3.64%