(Alliance News) - Stocks in London opened marginally lower on Friday as investors look cautiously ahead to the US jobs report in the afternoon, while Ashmore was the worst FTSE 250 performer after its annual results painted a mixed picture.
The FTSE 100 index was down just 2.14 points at 7,161.76. The mid-cap FTSE 250 index was down 3.11 points at 24,223.16. The AIM All-Share index was down 0.56 of a point at 1,307.11.
The Cboe UK 100 index was down 0.1% at 712.41. The Cboe 250 was flat at 22,017.52, and the Cboe Small Companies was down 0.2% at 15,550.81.
In mainland Europe, the CAC 40 stock index in Paris was down 0.3%, while the DAX 30 in Frankfurt was flat.
In the FTSE 100, Berkeley Group was up 0.5% after the housebuilder said it has started the new year with a continuation of the "resilient" market conditions seen last year.
As a result, the London-focused housebuilder expects to meet its annual profit guidance, with pretax profit for the year to April 30, 2022, to come in at or above the GBP518.1 million reported in financial 2021.
Further, Berkeley confirmed its proposed B-share capital return GBP451 million will be completed later this month. This will be done with the first half of the previously identified surplus capital of GBP228 million issued in August, then the remaining GBP223 million of the shareholder return issued in the year to March 31, 2022.
Following the B-share payment, the next scheduled shareholder return is the GBP141 million for the six months to September 30, which might be paid in dividends or via a share buyback, Berkeley added.
Steve Clayton, Hargreaves Lansdown Select fund manager, said: "We hold Berkeley in our HL Select UK Growth Shares fund because of its strong cash generation. Berkeley takes on the big, complex projects that rivals find daunting. That means it can buy land cheaply, because it can be the only one that turns up to the auction. Their development expertise allows them to turn cheap, brownfield sites into premium developments, making fat margins in the process."
Blue-chip peers Barratt Developments, Taylor Wimpey and Persimmon were up 1.3%, 0.4% and 0.7% respectively in a positive read-across.
AstraZeneca was up 0.7% after the Anglo-Swedish drugmaker said the EU approved its severe blood disorder drug for use in children.
The European Commission based the approval on positive interim results from AstraZeneca's Phase III clinical trial in children and adolescents with paroxysmal nocturnal haemoglobinuria.
In the FTSE 250, Ashmore Group was the worst performer, down 5.0%. The emerging markets-focused asset manager said it made significant progress against its strategic objectives over the past year.
For the financial year ended June 30, net revenue fell to GBP291.7 million from GBP330.5 million last year and pretax profit rose to GBP282.5 million from GBP221.5 million.
However, adjusted earnings before interest, tax, depreciation and amortisation was GBP195.7 million, down 12% from GBP222.5 million last year. The figure also just missed consensus forecasts of GBP196 million.
Assets under management rose 13% to USD94.4 billion as at June 30 from USD83.6 billion at the same time a year ago.
Mark Crouch, analyst at Toro, explained: "Ashmore's full year results paint a mixed picture for the asset management firm. While it has beat its profits from a year ago handsomely, both its Ebitda and net revenues were down. The company says this is largely down to lower fee income offset by higher fee performance, but the ongoing poor performance of emerging markets (EM) cannot be discounted. The profit growth reflects in the fact that a year ago its bottom line was hit hard by the onset of the coronavirus crisis.
"The asset manager focuses largely on EM, which has been a tricky area in the past year to say the least. Not only has the coronavirus crisis hit emerging markets hard, and continues to do so with vaccines largely only penetrating developed economies so far, but markets such as China have more recently been roiled by regulatory crackdowns."
The Japanese Nikkei 225 index closed up 2.1%. In China, the Shanghai Composite finished down 0.4%, while the Hang Seng index in Hong Kong was down 0.7%. The S&P/ASX 200 in Sydney ended up 0.5%.
Japan's Prime Minister Yoshihide Suga said Friday he will not run for his ruling party's leadership, effectively ending his tenure and throwing wide open the race for the next premier.
The shock decision after just a year in office comes with Suga's approval ratings at an all-time low over his government's handling of the response to the pandemic.
Further, it suggests a possible return to political instability for Japan, which cycled through prime ministers regularly before the lengthy tenure of Suga's predecessor Shinzo Abe. Suga has been battered by his government's response to the pandemic, with Japan struggling through a record fifth wave of the virus after a slow start to its vaccine rollout.
On the economic front, the Japanese service sector witnessed a sharp contraction during August, figures from au Jibun Bank and IHS Markit showed.
The au Jibun Bank Japan composite purchasing managers' output index - which measures combined output in the manufacturing and service sectors - fell to 45.5 index points in August from 48.8 points in July. The continued contraction was led by the fastest fall in services output for 15 months, alongside a softer increase in manufacturing production.
Readings above 50.0 points signal an improvement in business activity on the previous month while readings below show deterioration.
Meanwhile, services companies in China signalled a renewed fall in business activity during August, as rising Covid-19 case numbers at home and abroad hurt operations and demand, Caixin and IHS Markit said.
The headline seasonally adjusted Business Activity Index fell to 46.7 points in August from 54.9 points in July.
The composite output index posted 47.2 points in August, down from 53.1 points in July, to signal a renewed fall in overall business activity across China. Though modest, it marked the first decline in output since April 2020.
The pound was quoted at USD1.3835 early Friday, flat from USD1.3836 at the London equities close Thursday.
The euro was priced at USD1.1880, up from USD1.1862. Against the yen, the dollar was trading at JPY110.02, firm from JPY109.98.
Brent oil was quoted at USD72.98 a barrel Friday morning, down from USD73.34 late Thursday. Gold was trading at USD1,811.15 an ounce, soft from USD1,812.03.
The latest US nonfarm payrolls report is due at 1330 BST on Friday. Ahead of the data, a host of services and composite PMI readings are printed, including the eurozone at 0900 BST, the UK at 0930 BST and the US at 1445 BST.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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