UK shares dipped on Friday ahead of key US jobs data that could help shape investor expectations on interest rate cuts globally, while British packaging firm DS Smith gained on a buyout offer from bigger rival Mondi.
The FTSE 100 was down 0.1%, as of 0917 GMT.
The mid-cap FTSE 250 lost 0.2% after rising to a three-month high in the previous session.
Markets now await the crucial US jobs report, due later in the day, after signals from major central bank officials this week underscored hopes of monetary policy easing this year.
“If jobs are not growing and unemployment rate remains the same, it would suggest the US job market is not necessarily growing, potentially pointing towards further encouragement for that rate cut,” said Christopher Peters, a trading floor manager at Accendo Markets.
Peters added that Federal Reserve Chair Jerome Powell’s remarks to the US Senate were the strongest hint yet that monetary policy could ease in the coming months.
Shares of DS Smith climbed nearly 7%, to lead gains on the benchmark, after Mondi reached an agreement in principle for an all-share offer to buy the company for 5.14 billion pounds ($6.57 billion).
Mondi’s shares slipped 2%.
The internationally-focused FTSE 100 is eyeing its third straight week of losses, lagging its European and US counterparts, which rose to all-time highs on the back of technology stocks earlier this week.
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A no-surprise annual budget statement, however, put British mid-caps on track to rise nearly 1% for the week.
Energy shares were up 0.8%, helping limit losses, after oil prices gained on growing demand from the US and China.
Industrial engineering stocks led sectoral losses, dragged down by a 2.7% slump in Spirax-Sarco after Stifel downgraded the company’s shares to “sell” from “hold.” Among other stocks, Informa advanced 1.7% after the events organiser raised its earnings forecast for the current year and posted upbeat 2023 profit.
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