London’s FTSE 100 index slipped into negative territory by the close of trading on Monday, as investors chose to remain cautious with US financial markets closed for Labour Day. The FTSE 100 finished down 0.2% at 8,363.84. The FTSE 250 dropped 0.5% to 20,980.51, and the AIM All-Share declined 0.7% to 766.90.
Rightmove saw a notable 27% increase after Australia’s REA Group confirmed it is considering a cash and shares takeover bid for the UK property listing firm. Although REA stated it has not yet approached Rightmove or held discussions about a potential offer, it views the merger as a “transformational opportunity.”
Conversely, Rolls-Royce and BAE Systems saw declines of 6.5% and 2.8%, respectively. The Guardian reported that the UK government has suspended 30 arms export licences with Israel, amid concerns that UK-manufactured weapons might be used in breach of international humanitarian law. This suspension covers components for military aircraft, including fighter jets, helicopters, and drones. The review by the new Labour government found a “clear risk” that UK arms could violate humanitarian laws related to Palestinian detainees and aid delivery to Gaza.
Looking ahead, market focus this week is on US employment data, culminating in the jobs report due on Friday. Analysts suggest that the Federal Reserve is increasingly concerned about potential negative impacts on consumption spending due to risks in the labour market.
Barclays predicts non-farm payrolls will rise by 175,000, exceeding the consensus estimate of 165,000, and expects the unemployment rate to decrease to 4.2% from 4.3%. Barclays noted that such results would reinforce expectations for three 25-basis point rate cuts by year-end, while weaker numbers could prompt a 50-basis point cut in September.
Prior to the jobs report, job vacancy data will be released on Wednesday, and ADP private payrolls along with weekly jobless claims figures will be published on Thursday.
In the FTSE 250, Kainos fell 14% after warning that its full-year revenue would fall short of market expectations. The company attributed this to short-term impacts from the UK general election on its Digital Services and pricing pressures in Workday Services. Kainos now anticipates only a modest revenue increase for the financial year ending March 31, 2025, below current market expectations. The firm’s revenue consensus stands at £415.5 million, compared to £382.4 million for the financial year 2024. Adjusted pretax profit is expected to align with market forecasts of £79.1 million, compared to £77.2 million in financial 2024.
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