Reuters
U.K. stocks rose on gains for mining shares, recovering somewhat from a fall the prior day, as traders looked ahead to the closely watched monthly U.S. jobs report.
Earnings season continued, with air carriers International Consolidated Airlines Group SA and EasyJet PLC moving higher on well received reports.
How markets are moving
The U.K.’s FTSE 100 index rose 0.4% to 7,529.38, with only the financial group losing ground. The basic materials sector fared the best. On Thursday, the gauge fell 0.5%, pulling back from the highest close since Jan. 30 that it hit on Wednesday.
For the week, the London benchmark was looking at a 0.4% gain. The rise puts the FTSE 100 on track for a six-strong run of weekly gains, which it hasn’t achieved since January.
The pound traded at $1.3563, up slightly from $1.3573 late Thursday in New York. Sterling has lost roughly 1.6% this week against the greenback, continuing a recent slide driven by disappointing economic data and a strengthening dollar.
What’s driving the market
Stocks were getting a lift from some well received corporate earnings releases, while the lingering weakness in the pound was also providing some support. The FTSE 100 is home to many multinational companies that generate much of their sales in foreign currencies.
Also injecting some cheer was Caixin data, which showed China’s services sector grew at a faster pace in April. Miners were gaining, as China is a big buyer of industrial and precious metals. The basic materials group has a nearly 9% weighting on the FTSE 100, and miners have a roughly 88% weighting in that sector, according to FactSet data.
On the geopolitical front, U.S. Treasury Secretary Steven Mnuchin said trade talks between U.S. and China, now in their second day in Beijing, are going well, according to media reports. But the U.S. delegation has presented Chinese officials with a lengthy list of demands aimed at reducing the trade imbalance between the world’s two biggest economies, The Wall Street Journal reported.
Worries about heightened trade tensions between the world’s two largest economies have rattled financial markets throughout this year.
During afternoon trade, attention will turn to the U.S. nonfarm payrolls report, scheduled for release at 8:30 a.m. Eastern Time, or 1:30 p.m. in London. Investors will watch for the addition of 200,000 jobs, or wage growth near 3%, which could prompt the U.S. Federal Reserve to adjust its pace of interest rate rises.
Stocks in focus
Among miners, shares of Anglo American and BHP Billiton PLC each rose 1.5%, while Antofagasta PLC picked up 1.2%.
IAG shares climbed 5.3%, topping the FTSE 100. The parent company of British Airways and Vueling said its first-quarter adjusted operating profit rose by 75%.
HSBC Holdings PLC stock lost 2.8% after the Asia-focused lender posted a rise in operating costs in the first quarter. The bank said it plans to buy back another $2 billion in shares.
EasyJet shares were up 2.2%. The budget airline said its load factor, or the percentage of a plane filled with passengers, rose to 93.4% in April, from 92.9% the previous year.
What strategists are saying
“Note [the pound was] weak again overnight, versus USD, helping the FTSE blue-chip index off its lows. Sentiment [was] further supported by a bigger improvement in China Caixin PMI Services, from last month’s weakest since December,” said Accendo analysts Mike van Dulken and Artjom Hatsaturjants in a note.
“Slower increase in wage levels will be received as a reason for the Fed to stick with their current plan of two more moves this year,” said Konstantinos Anthis, head of research at ADS Securities, in a note.