FTSE 100 index edges lower ahead of US jobs data

Britains blue-chip index edged lower on Friday after US equity markets suffered their worst performance in half a year on Thursday ahead of US employment data that may signal an early end to Feds equity-friendly monetary policy.

The FTSE 100 index fell by 0.98%, or 65.81 points, to 6 664.30 points by 8:18 GMT, having shifted in a daily range between 6 720.80 and 6 661.30 points. The index fell by 0.64%, or 43.33 points on Thursday, to close the trading session at 6 730.11 points.

The S&P 500 index slid 2.00% on Thursday to 1 930.67 points, while the Dow shed 1.88% to close at 16 563.30 points. The Nasdaq 100 fell by 2.10% to 3 892.50 .

Markit Economics reported that manufacturing activity in France further contracted July, with the Markit Manufacturing PMI scoring at 47.8, down from 48.2 in June but beating projections for a further drop to 47.6.

Germanys manufacturing sector posted a smaller growth from what preliminary estimates showed, with the German Manufacturing PMI registering at 52.4 in July, trailing the flash readings 52.9. However, this was an improvement compared to Junes final reading of 52.0.

The Eurozone as a whole saw manufacturing activity growth unchanged at 51.8 in July, slightly below preliminary estimates of 51.9 released earlier in the month. This was the 13th straight month of expansion. Britains manufacturing activity gauge is due for release at 08:30 GMT.

Meanwhile, Chinas vast manufacturing sector expanded at the fastest pace in more than two years in July. Government data provided by the National Bureau of Statistics showed China’s Manufacturing PMI edging up to 51.7, beating estimates for a jump to 51.4 from June’s 51.0.

The reading matched estimates by HSBC and Markit Economics, whose private gauge, at 51.7, was the highest in 18 months, in spite of trailing expectations for a jump to 52.0 from June’s final reading of 50.7.

The private report highlighted that output and total new orders both rose at the strongest rates since March 2013, while new export work increased at the second-fastest pace in over 3-1/2 years. As a result, purchasing activity rose solidly while job shedding eased for the second successive month and was only slight.

Up to come

Investors now eyed the all-important US non-farm payrolls and unemployment rate, due to be released at 12:30 GMT, as well as the Reuters/Michigan consumer sentiment and ISMs manufacturing Report on Business.

Preliminary estimates suggest US employers may have added 230 000 workers to payrolls, which would be the 4th consecutive month of growth job above 200 000. Unemployment is expected to have remained unchanged at 6.1%, the lowest in 6 years. A confirmation of the forecasts may signal an earlier end of Feds ultra-loose, equity-friendly monetary policy. Although reinforcing the view of a decisive economic recovery, thus benefiting the markets in the long-term, scaling back Feds easy money supply would be harmful in the short-term.

Corporate news, top movers

The FTSE 100s top gainers for the day were International Consolidated Airlines Group SA, Rexam Plc, Smith & Nephew Plc.

IAG rose by 2.66%, or 8.80 pence, to 339.60 pence by 7:58 GMT after reporting that second-quarter operating profit surged 55% to 380 million euros before one-time items, and reaffirmed its full-year guidance.

Rexam gained 2.0%, or 10.00 pence, to trade at 511.00 pence at 8:01 GMT after reporting its first-half profit surged to 164 million pounds from 128 million.

Smith & Nephew, Europes largest maker of artificial joints, rose by 2.10%, or 21.50 pence, to 1 047.50 pence after reporting a 10% jump in second-quarter trading profit.

Britains top equity index saw Schroders Plc, United Utilities Group Plc and Capita Plc bottoming on the scoreboard.

Schroders fell by 2.66%, or 63.50 pence, to 2 326.50 pence by 8:08 GMT. Capita lost 2.50%, or 29.50 pence, to stand at 1 172.50, while United Utilities fell by 2.50%, or 22.25 pence, to 867.75 pence.