LONDON MARKETS: FTSE 100 On Track For All-time High As U.S. Records Lift Trading Mood
Oil companies fall as crude prices slide more than 2%
U.K. stocks were heading for a fresh all-time high on Friday, riding higher on a weaker pound ahead of next week's general election and on optimism over positive stock-market closes in the U.S. and Asia.
The FTSE 100 Index jumped 0.6% to 7,591.38, on track to take out the previous record close of 7,547.63 set on May 26.
The solid open "comes courtesy of positive leads from the U.S and Asia, with all three major stateside bourses notching record closing highs while Japan's Nikkei trades above 20,000 points for the first time since 2015," analysts at Accendo Markets said in a note.
Read:U.S. stocks close at record on back of robust labor-market data (http://www.marketwatch.com/story/us-stocks-on-track-to-edge-higher-rebounding-from-two-day-dip-2017-06-01)
"This fresh investor bullishness stems from a significant beat for U.S. private sector jobs yesterday (253,000 vs. 180,000 expected), raising hopes that today's nonfarm payrolls print will also surprise to the upside to seal a June rate hike by the Fed," they added.
The closely watched U.S. jobs report comes out at 1:30 p.m. London time, or 8:30 a.m. Eastern Time, and it is expected to show 185,000 new jobs were added to the economy (http://www.marketwatch.com/story/another-shower-of-new-us-jobs-expected-for-may-2017-06-01) in May, according to economists surveyed by MarketWatch.
If the report comes in strong, it'll likely strengthen expectations that the U.S. Federal Reserve will lift interest rates later this month. That could in turn boost the dollar against the pound .
Sterling has slipped in recent days as opinion polls ahead of the June 8 general election in the U.K. point to a much tighter race than anyone had expected. A survey out earlier this week showed Theresa May's Conservative Party's lead over Labour had narrowed to three points, down from 20 points about a month ago.
Read:5 things to know about the U.K.'s general election next week (http://www.marketwatch.com/story/5-things-to-know-about-the-uk-general-election-next-week-2017-06-01)
And see:The U.K. election -- the nightmare, best and most likely scenarios for stocks (http://www.marketwatch.com/story/uk-election-the-nightmare-best-case-and-most-likely-scenarios-for-stocks-worldwide-2017-06-01)
The pound continued lower on Friday, fetching $1.2863, compared with $1.2881 late Thursday in New York. A weaker pound tends to boost the FTSE 100 as about 75% of revenues for those listed companies come from overseas.
Stock movers: Energy companies declined, as oil prices lost more than 2% (http://www.marketwatch.com/story/oil-prices-stay-weak-as-investors-return-to-worries-over-rising-production-2017-06-02). Shares of BP PLC (BP.LN) (BP.LN) fell 0.7%, and Royal Dutch Shell PLC (RDSB.LN)(RDSB.LN) gave up 0.5%.
Economic data: The U.K construction purchasing managers' index for May came in stronger than expected, showing a rise rather than the drop expected. The PMI posted 56, up from 53.1 in April and above the 52.7 forecast. A reading above 50 signals expansion.
"U.K. construction companies experienced a sharp rebound in business activity during May, helped by the fastest upturn in residential work since the end of 2015," said IHS Markit/CIPS, which released the report.
(END) Dow Jones Newswires
June 02, 2017 04:48 ET (08:48 GMT)