FTSE 100 Live 04 November: US jobs figures due, reaction to Bank of England recession warning

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Covid speculation boosts Hang Seng, Pru 3% higher

Hong Kong’s Hang Seng index has surged 5%, reflecting renewed speculation that China is taking steps to relax its strict Covid policies.

The talk also led to gains of more than 3% for shares in London-listed mining stocks and Asia-focused insurer Prudential.

Hargreaves Lansdown analyst Sophie Lund-Yates said: “China’s impenetrable policies have caused a great deal of economic pain, both inside and outside the country.

“Supply chains, manufacturing and demand have all come under very serious pressure. Any indication that some rules could be relaxed would be an immediate dose of grease in the jarring cogs of China’s economy.”

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“Outperforming” FTSE 100 opens higher

The FTSE 100 index has built on yesterday’s robust session by adding another 0.7% or 46 points to 7234, while the FTSE 250 index is up by a more modest 0.4% at 18,187.

Richard Hunter, head of markets at Interactive Investor, said the UK stock market remains a tale of two indices as the domestically-focused FTSE 250 continues to shoulder the burden of a pallid economy.

Hunter points out that the second tier benchmark is down by 23% in the year to date, whereas the globally-focused FTSE 100 continues to show relative resilience following a decline of just 2% so far this year.

He said the FTSE 100 outperformance had been “propelled by a mixture of defensive and cyclical plays, with a particular weighting to the likes of the oil majors, and where an average dividend yield of 4% remains an additional attraction”.

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DFS defies market gloom and hails ‘positive trend’ in consumer demand

Furniture business DFS today defined industry gloom and said it had “observed a more positive trend” in consumer demand in recent weeks despite a significant softening earlier in the year.

The firm said it had increased its market share and expected earnings to be in the mid range of analyst expectations.

Tim Stacey, Chief Executive, said: “We are pleased to report that since mid September we have seen positive year-on-year order volume growth.

“While we continue to be watchful of the macro economic environment, we continue to take market share and our market leading position, inherent scale and proven strategy give us confidence in our future prospects.”

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Average used car price nears £18,000 up almost 50% from pre-pandemic levels

The average price of a used car rose by almost £180 in October to reach £17,587 according to a market tracker driven by Auto Trader.

That took the rise since August to almost £550 and the run of months without a drop in prices to 31. The rises come as the secondhand car market benefits in part from pent-up demand from the pandemic and longer delivery times for new vehicles, where there are problems in the supply chain.

It left the average price up 47% from pre-pandemic levels.

Richard Walker, Auto Trader’s director of data and insights, said: “The market won’t be immune to the current financial uncertainties, but there’s a range of factors unique to the automotive sector which should insulate it from some of the broader economic disruption. From what we’re tracking, there’s no sign of average used car prices falling.”

Cars were also leaving forecourts at speed. Used vehicles took an average of 25 days to be sold in October, one day faster than in September. Nonetheless, the number of advert views on Auto Trader’s marketplace slipped 4% year-on-year, but were up 14% from 2019, which was a more normal trading year.

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Pound steady, focus on US payroll report

The pound has steadied at just above $1.12, having fallen 2% yesterday as the worst performing of the world’s major currencies.

The sharp decline followed projections from the Bank of England that interest rates might not go as high as City expectations, in contrast to the US where the Federal Reserve has raised Wall Street guidance.

The weaker pound boosted overseas earners in the FTSE 100, which closed 0.6% higher in a session when other global markets traded lower. In the US, the S&P 500 fell 1% and the Nasdaq Composite dropped 1.7%.

CMC Markets expects the FTSE 100 to open 40 points higher at 7228, but traders will be focused on this afternoon’s monthly jobs report in the US.

September payroll numbers showed the addition of 263,000 jobs and an unemployment rate of 3.5%. Hiring for temporary roles ahead of Black Friday means the labour market is likely to remain tight for the rest of the year, with markets expecting an October figure close to 200,000 and a rate of 3.6%.

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