(Alliance News) - London's FTSE 100 traded around opening levels at midday on Friday, lagging European peers, ahead of the key US jobs report.
The FTSE 100 index fell 6.69 points, 0.1%, at 8,342.69. The FTSE 250 rose 37.00 points, 0.2%, at 21,038.06, and the AIM All-Share climbed 1.31 points, 0.2%, at 738.23.
The Cboe UK 100 was down 0.1% at 837.74, the Cboe UK 250 was up 0.3% at 18,540.25, and the Cboe Small Companies rose 0.4% to 16,141.48.
In Europe, the CAC 40 in Paris stormed 1.3% higher despite ongoing political uncertainty while the DAX 40 in Frankfurt climbed a more modest 0.2%.
Kathleen Brooks, research director at XTB said French luxury names are leading the recovery in Paris.
Hermes rose 2.6%, LVMH climbed 3.2% while Gucci owner Kering jumped 5.3%.
"Hopes of a Chinese stimulus package that focuses on the consumer are building, as Beijing officials meet to discuss 2025 growth targets. Added to this, French luxury names are less impacted by domestic political travails as most of their sales are generated overseas. They are likely to be more impacted by Donald Trump winning the US election than by whatever happens to President Macron. Overall, a technocratic government is on the cards, the fiscal can has been kicked down the road and although forging a new budget is a tough endeavour, the organs of French government can roll over the 2024 budget month on month in 2025, and there is no chance of a US-style government shut down," Brooks said.
French President Emmanuel Macron is holding talks with French political leaders on the left and right as he seeks to name a new prime minister and find a way out of France's political crisis.
Macron adopted a defiant tone in an address to the nation late Thursday, 24 hours after Prime Minister Michel Barnier's government was ousted in a historic no-confidence vote.
Macron vowed to name a new prime minister in the "coming days", rejected growing pressure from the opposition to resign and blamed an "anti-republican front" of the hard left and far right for France's woes.
Meanwhile, data showed the eurozone economy grew at the pace expected in the third-quarter of the year.
According to Eurostat gross domestic product expanded by 0.4% in the three months that ended September 30 from the three months that ended June 30. Growth picked up from 0.2% in the second quarter from the first.
Year-on-year, the eurozone economy increased by 0.9% in the third-quarter, accelerating from a 0.5% increase in the second-quarter.
It was the fastest pace of annual growth since the first-quarter of 2023. Quarter-on-quarter growth was the strongest since the third-quarter of 2022.
Investor attention now switches to the US nonfarm payrolls data at 1330 GMT, seen as pivotal in determining whether the Federal Reserve will cut interest rates at its December meeting.
Bank of America expects nonfarm payrolls to rise by 240,000 in November after coming in at just 12,000 in October.
"This above-consensus forecast is driven by expected payback for the temporary drag on payrolls in Oct due to Hurricane Milton and the Boeing strike," it explained.
The FXStreet consensus is for payrolls to increase by 200,000 in November.
BofA estimates that the hurricane took at least 60,000 off October's payrolls, while strikes, which have mostly since ended, accounted for an additional 41,000 drag.
ING said given expectations of a bounce back after last month's weather and strike-hit figure, the market now probably "sees less than 200,000 as a bad number and above 300,000 as a good number."
The pound was quoted at USD1.2763 early Friday afternoon, up from USD1.2753 at the time of the London equities close on Thursday. The euro stood at USD1.0582, up from USD1.0568. Against the yen, the dollar was trading at JPY150.56, up from JPY150.17.
Back in London, shares in FTSE 250-listed Direct Line rose 7.1% after it said it is "minded to recommend" an improved takeover approach from London-based insurer Aviva.
The proposed deal, announced in a joint statement, will see Aviva pay 129.7 pence in cash, and 0.2867 of a new Aviva share for each Direct Line share. Direct Line shareholders also would receive a 5p per share dividend before completion.
Based on Aviva's closing share price before the offer period started in November, the proposal values each Direct Line share at 275p, or around GBP3.6 billion.
Aviva's new plan represents a 10% premium to its initial approach of 250p per share made in November.
Panmure Liberum thinks the revised offer is "good for both sets of shareholders – Aviva has not overpaid and Direct Line shareholders crystalize an attractive return."
Aviva shares eased 0.5%.
Elsewhere in the FTSE 100, Spirax was under pressure, falling 2.0% after JPMorgan downgraded to 'neutral' from 'overweight'.
Also in the red, water suppliers Severn Trent and United Utilities, down 2.4% and 2.0% respectively.
Jefferies downgraded both to 'hold' from 'buy'.
While "cautiously optimistic" about the December 19 Final Determinations for the UK water sector, Jefferies thinks the the risk-reward looks more balanced on United Utilities and Severn Trent at their current valuations."
Morgan Stanley downgraded the European utility sector to 'in-line' from 'attractive'.
"With a finely balanced risk-reward outlook for 2025 amidst multiple uncertainties, we move our sector view to in-line. We prefer electricity networks, and would be selective elsewhere."
National Grid, down 0.6%, remains its top pick.
Housebuilder Berkeley Group slipped 2.5% after its half-year results.
The Surrey, England-based property developer and housebuilder said there was good underlying demand for homes, as it reported revenue increased 7.2% in the six months to the end of October to GBP1.28 billion from GBP1.19 billion a year before.
Pretax profit was down 7.7% in the half-year to GBP275.1 million from GBP298.0 million in the first half of financial 2024.
Berkeley said it is on track to achieve pretax profit guidance of GBP525.0 million for the full-year, and at least GBP450 million for the following year.
It also set out a new ten-year growth strategy to provide a new capital allocation framework.
As part of the plan, Berkeley has identified GBP7.00 billion of free cash flow to invest over the next ten years.
There was good news elsewhere for housebuilders as a survey from Halifax showed UK house prices have risen at their fastest pace in two years.
The average house price was up 4.8% in November from a year prior, the biggest annual jump since November 2022. The average price climbed 1.3% from October to a record GBP298,083, the fifth monthly rise in a row.
Among small-caps Quiz plunged 41%.
The Glasgow, Scotland-based omnichannel fashion brand said it has seen a "marked decline" in traffic both online and in-store in November compared to previous months and the prior year.
Sales in the fourth months to November were down 5.7% to GBP24.9 million.
As a result, the firm warned cash headroom available was lower than anticipated and that existing bank facilities could be fully utilised in the first-quarter of 2025.
It launched a financing and strategic review but anticipates that additional funding will be required in the first-quarter of 2025.
Brent oil was quoted at USD71.40 a barrel early Friday afternoon, falling from USD72.22 late on Thursday. Gold was higher at USD2,638.58 an ounce from USD2,635.59.
By Jeremy Cutler, Alliance News reporter
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