FTSE 100 preview: Index looking up as jobs report props up sentiment

Melrose poised to hike bid for GKN

FTSE 100 preview: Index looking up as jobs report props up sentiment

The FTSE 100 looks set to start the new week on the front foot, amid upbeat sentiment around the world in the wake of the US non-farm payrolls report on Friday. GKN (LON:GKN) will stay in focus amid reports that Melrose Industries (LON:MRO) is set to hike its offer for the company.

Upbeat start ahead

IG’s opening calls suggest that the Footsie will start the week 0.20 percent higher at 7,239 points. The blue-chip index is likely to take cues from the US where shares surged on Friday following the monthly jobs data.

“This jobs report was the perfect slice of pizza,” Kevin Mahn, president and chief investment officer at Hennion & Walsh, told CNBC’s ‘Power Lunch’ on Friday. “It did reaffirm the underlying strength of this economy, but it also diminished some of those inflationary concerns and the potential that there could be more than three rate hikes this year.” Asian shares have advanced this morning, tracking the US higher.

“The release threaded the stock needle perfectly, exhibiting strong overall net job adds alongside an increase in the participation rate and tepid wages suggesting labour demand is being met by new entrants into the workforce,” analysts at JPMorgan said in a note, as quoted by Reuters, cautioning, however, that in reality, the market was “probably reading too much into a single jobs report”.

In the UK, the FTSE 100 added 21.27 points to end the previous session 0.30 percent higher at 7,224.51.

GKN to stay in focus

There are no major macroeconomic releases out of Europe or the US to provide direction to the market in today’s trading and no blue-chips are scheduled to update investors on their performance.

In corporate news, The Sunday Times reports that Melrose will raise its £7.3-billion offer for GKN this week in an effort to clinch the hostile takeover of the FTSE 100 engineer. The move will come after the blue-chip group agreed a deal to merge its automotive business with Dana.

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