London pre-open: Stocks to nudge up ahead of manufacturing data, jobless claims

by | Jul 1, 2021

London stocks were set to edge up at the open on Thursday as investors eye the latest UK manufacturing data and US jobless claims later in the day.
The FTSE 100 was called to open six points higher at 7,043.

Investors will be digesting the latest manufacturing figures out of China. The Caixin purchasing managers’ index for the sector fell to 51.3 in June from 52.0 in May as new export orders fell, coming in slightly below expectations for reading of 51.9.

Wang Zhe, a senior economist at Caixin Insight Group, said: “Overall, the manufacturing sector continued to stably expand in June, despite the impact of the pandemic.

“In the second half of this year, the low base effect from last year will weaken. Inflationary pressure, coupled with the economic slowdown, is still a serious challenge for China.”

Capital Economics said: “The Caixin manufacturing index published today dropped back last month and adds to signs from the official PMI released yesterday that momentum in industry is waning. The surveys point to a levelling off in demand and easing of price pressures, even as supply shortages continue to constrain output.”

Coming up later in the day, Markit’s UK manufacturing PMI for June is due at 0930 BST, while US initial jobless claims are at 1330 BST.

In corporate news, JD Sports Fashion said it was on track to deliver annual profits of at least £550m as it pledged to split the roles of chief executive and chairman and would consider paying back government furlough cash.

In a trading update ahead of what was expected to be a stormy annual shareholders meeting, JD Sports said it would move to divide the role currently held by boss Peter Cowgill before the 2022 AGM.

Elsewhere, Associated British Foods said it expected annual profit to be in line with the year before after sales at Primark outstripped forecasts in the third quarter.

Primark’s revenue in the three months to 19 June was £1.6bn, up from £0.6bn a year earlier, and the retailer’s like-for-like sales rose 3%.

ABF said it expected Primark’s annual profit to be broadly in line with a year earlier. It had previously guided investors that Primark’s profit would be “somewhat lower” than the year before.

“Our outlook for the adjusted operating profit for the group, stated before repayment of job retention monies, is now in line with last year,” ABF said.

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