Global stock markets rose Friday before vital US payrolls data, with London hitting another record high as investors tracked speculation of a bidding war for mining giant Anglo American.
Anglo American shares vaulted more than three percent in morning deals to top London’s risers after a report that Swiss-based commodities giant Glencore was considering a move on the British group.
The speculation emerged one week after Anglo had rejected a blockbuster $39-billion takeover bid from Australian rival BHP, slamming it as highly unattractive and opportunistic.
Anglo and Glencore declined to comment on the Reuters report, which cited unidentified sources.
London’s benchmark FTSE 100 index of top companies extended its record-breaking run to strike a new high at 8,215.29 points, dragging Frankfurt and Paris higher in its wake.
– ‘Hankering for bidding war’ –
UK investors also tracked news that the UK’s ruling Conservatives have lost a parliamentary seat in Blackpool, northwest England, to the main Labour opposition — which has also made hefty gains in local council seats according to early results.
That piled pressure on embattled Tory leader and Prime Minister Rishi Sunak ahead of this year’s general election, which opinion polls predict he will lose heavily to Labour.
“London shrugged aside the political tremors in Blackpool and beyond, as the FTSE 100 set a fresh record above 8,200 with Anglo American setting the pace for the blue chips with Glencore now being mentioned as a potential buyer for the miner,” Finalto analyst Neil Wilson told AFP.
“A bidding war for an FTSE beast like Anglo would be just what investors have been hankering for.”
BHP’s colossal bid aims to create the world’s biggest-listed producer of copper, which is expected to face a demand boom due to its pivotal use in renewable energy technology like electric vehicles and solar panels.
In Asia, Hong Kong led gains on a surge in tech giants due to forecast-busting results and a huge stock buyback from industry bellwether Apple, while the yen extended gains against the dollar on revived hopes for US interest rate cuts.
– Payrolls in focus –
The global stock gains come as traders turn their attention to the release of key US non-farm payrolls (NFP) data due later in the day, which could play a major role in the Federal Reserve’s decision-making on when to lower borrowing costs.
A string of data this year showing inflation was holding stubbornly above target, while the economy and labour market remain resilient, has in recent months seen investors lower their forecast for 2024 rate cuts from six in January to one or two now.
That has dented sentiment on trading floors, though that has been offset by a strong corporate earnings season and healthy company forecasts, helping to push equities higher.
“It’s a risk-on day as we wait for payrolls,” noted XTB research director Kathleen Brooks.
“The payrolls report is a key part of the puzzle for the Fed, and April’s report will be important to determine the timing of the first (interest rate) cut.”
Wall Street’s three main indexes notched up sizeable gains on Thursday, with the Nasdaq piling on more than one percent as tech outperformed again.
Apple, which published results after the US close, said first-quarter profit ebbed but topped market forecasts as it announced a massive $110 billion share buyback.
– Key figures around 1030 GMT –
London – FTSE 100: UP 0.5 percent at 8,212.27
Paris – CAC 40: UP 0.6 percent at 7,964.48
Frankfurt – DAX: UP 0.6 percent at 17,994.75
EURO STOXX 50: UP 0.7 percent at 4,923.64
Hong Kong – Hang Seng Index: UP 1.5 percent at 18,475.92 (close)
Tokyo – Nikkei 225: Closed for a holiday
Shanghai – Composite: Closed for a holiday
New York – Dow: UP 0.9 percent at 38,225.66 (close)
Dollar/yen: DOWN at 153.12 yen from 153.52 yen on Thursday
Euro/dollar: UP at $1.0744 from $1.0731
Pound/dollar: UP at $1.2557 from $1.2537
Euro/pound: UNCHANGED at 85.56 pence
West Texas Intermediate: UP 0.3 percent at $79.15 per barrel
Brent North Sea Crude: UP 0.3 percent at $83.92 per barrel
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