London pre-open: Stocks seen lower ahead of payrolls
London stocks were set to edge lower at the open on Friday as investors eyed the release of the latest US non-farm payrolls report and continued to mull the impact of the coronavirus.
The FTSE 100 was called to open 12 points lower at 7,492.
The People’s Bank of China said earlier that the country’s economy could be disrupted in the first quarter as a result of the outbreak, but a recovery is expected once the virus is brought under control. Analysts said China's first-quarter growth could slow by 2 percentage points or more from 6% in the last quarter, but could also rebound sharply if the outbreak peaks soon. The PBOC said it will maintain ample liquidity and deepen interest rate reforms.
On the data front, the non-farm payrolls report, unemployment rate and average earnings are all due at 1330 GMT.
CMC Markets analyst David Madden said: "The update is expected to show that 160,000 jobs were added last month, which would be an improvement on the 145,000 that were posted in December. The unemployment rate is tipped to hold steady at 3.5% - which is a fifty year low. Yearly average earnings are tipped to come in at 3%, and that would be a slight increase on the 2.9% reading of December.
"The US labour market is clearly in great shape so it might be difficult to keep adding jobs at a sizeable rate. Traders are paying more attention to the wages component these days as workers who earn more tend to spend more. It is worth remembering that yesterday the jobless claims rate fell to 202,000, while on Wednesday the ADP report was 291,000."
In corporate news, Burberry said the coronavirus was affecting its sales in China and Hong Kong and that more than a third of its stores in mainland China were closed.
The luxury goods company said 24 of its 64 mainland China stores were closed. Its other outlets are operating with reduced hours and customer footfall is down significantly.
House builder Bellway reported record first half volume output, with the completion of 5,321 new homes, a rise of 6.3%, as it said full year profits would be in line with estimates.
"The pricing environment remained firm, although there remain ongoing challenges in relation to higher priced homes,” Bellway said.
"In addition, there continues to be upward pressure on construction costs across the wider sector. Bellway is implementing a number of ongoing initiatives in order to help mitigate these cost increases."