London close: Shares rebound as pound slips, crude oil gains

London stocks recouped part of the previous day's losses on Friday which had taken the top-flight index to its worst level since the Brexit referendum, as investors eyed the release of the latest non-farm payrolls report.

The FTSE 100 was up 1.1% to 6,778.11, having closed down 3.2% at 6,704.05 on Thursday as the arrest of Chinese tech giant Huawei's chief financial officer sparked renewed concerns about Sino-US relations and a global selloff.

In currency markets, the pound was down 0.51% against the dollar at 1.27220 and 0.54% lower versus the euro at 1.1177 ahead of next week's parliamentary vote on Theresa May's Brexit deal.

While the gains in London came as a welcome relief after Thursday's "horrible" session, "this only claws back some of the losses", said Russ Mould, investment director at AJ Bell.

"The important point to note is the large swings in the market on a daily basis in recent weeks, which may suggest volatility could become one of the key themes in 2019."

Helping to prop up sentiment, front month Brent crude oil futures bounced back by 4.272% to trade at $62.74 a barrel after OPEC and Russia announced a decision to cut their combined oil output by 1.2m barrels a day starting from January.

That news helped to offset the drag from renewed selling on Wall Street amid news of a slowdown in hiring in the States during November.

According to the US Department of Labor, 155,000 Americans were hired last month, which was less than the 205,000 person increase which economists had forecast, even as the length of the average work week shortened a little.

On home shores, house prices were shown to have dropped much more than expected last month, with the latest survey from lender Halifax revealing annual growth fell to a six-year low amid intensifying political and economic uncertainty.

Compared to the month before, house prices fell 1.4% in November, versus market expectations for a 0.2% increase. Annual price growth in November limped to 0.3%, the lowest level since the end of 2012, down from the 1.5% growth seen in October and well below the 1.0% consensus forecast.

Alongside historically low mortgage rates, Halifax managing director Russell Galley said the relatively limited supply of new and existing properties for sale continued to sustain house prices nationally.

This was being undermined by a reduced supply of bank credit, pointed out economist Samuel Tombs at Pantheon Macroeconomics,as the Bank of England’s latest credit conditions survey indicated that uncertainty about Brexit has made banks more cautious about even secured lending.

"With political uncertainty only set to escalate when parliament rejects the Prime Minister’s Brexit deal next week, the housing market will remain in the doldrums over the coming months," Tombs said. "But even if, as we expect, a Brexit deal is signed off at the eleventh hour, extending the economic status quo for up to four years, house price growth likely will remain sluggish, as the MPC will start to raise Bank Rate at a faster rate."

Berkeley Group provided some cheer for the sector, however, as it posted a drop in half-year profit on the back of Brexit uncertainty but lifted its profit forecast for the full year.

George Salmon, equity analyst at Hargreaves Lansdown, said the results were "strong" but cautioned that there’s "only so much the group can do to look after its share price".

"Sentiment will remain closely tied to the Brexit barometer, since London could well be in the eye of the storm should a disorderly departure trigger a housing meltdown. While the shares remain something of a binary bet on Brexit in the short-term, looking further afield Berkeley’s niche operating model and enviable track record mean we think it should be a long-term winner."

Tesco was the standout gainer following an upgrade to ‘neutral’ from ‘underperform’ at Exane BNP Paribas.

Premier Oil gushed higher as it said year-to-date group production year to date had averaged 79,400 barrels a day, hitting a record 98,700 this week.

Games Workshop was on the front foot after saying first-half results would be in line with expectations for the year.

On the downside, Associated British Foods was the worst performer on the FTSE 100 as it said that its Primark retail arm endured a "challenging" period of trading last month but expectations for annual profits growth remain unchanged. In a statement ahead of its annual shareholder meeting, the food and clothing conglomerate repeated its guidance for adjusted earnings per share for the group to be flat for the full year.

AstraZeneca was in the red after saying that its immunotherapy Imfinzi did not meet the main goals of a late-stage study for the treatment of advanced head and neck cancer.

Animal genetics company Genus also traded lower after saying it raised £68m in a share placing at 2,200p, which represents a 7.8% discount to the closing price of 2,386p on Thursday.

In broker note action, IP Group was battered by a downgrade to ‘underperform’ at Jefferies, while Centamin was cut to ‘hold’ at Berenberg and Rotork was boosted by an upgrade to ‘neutral’ at Credit Suisse.

Market Movers

FTSE 100 (UKX) 6,778.11 1.10%
FTSE 250 (MCX) 17,844.11 0.51%
techMARK (TASX) 3,343.02 0.09%

FTSE 100 - Risers

Wood Group (John) (WG.) 628.00p 4.42%
Evraz (EVR) 483.00p 3.84%
Smith & Nephew (SN.) 1,475.00p 3.84%
Anglo American (AAL) 1,607.80p 3.30%
Glencore (GLEN) 279.40p 3.14%
Just Eat (JE.) 551.40p 3.07%
Royal Dutch Shell 'A' (RDSA) 2,348.50p 2.97%
CRH (CRH) 2,048.00p 2.84%
Royal Dutch Shell 'B' (RDSB) 2,365.00p 2.76%
Tesco (TSCO) 199.05p 2.74%

FTSE 100 - Fallers

Associated British Foods (ABF) 2,242.00p -4.60%
GVC Holdings (GVC) 670.50p -1.91%
Paddy Power Betfair (PPB) 6,455.00p -1.75%
Informa (INF) 651.80p -1.66%
Shire Plc (SHP) 4,535.00p -1.63%
Melrose Industries (MRO) 154.85p -1.28%
Lloyds Banking Group (LLOY) 54.13p -1.17%
Kingfisher (KGF) 228.40p -1.13%
Halma (HLMA) 1,307.00p -0.98%
Micro Focus International (MCRO) 1,465.50p -0.95%

FTSE 250 - Risers

Premier Oil (PMO) 75.43p 14.75%
Tullow Oil (TLW) 189.60p 7.42%
Cairn Energy (CNE) 167.70p 4.88%
Auto Trader Group (AUTO) 436.90p 4.50%
Stagecoach Group (SGC) 170.90p 4.46%
Amigo Holdings (AMGO) 266.00p 4.42%
Games Workshop Group (GAW) 3,120.00p 4.34%
Rotork (ROR) 246.70p 3.66%
Bank of Georgia Group (BGEO) 1,348.20p 3.28%
Quilter (QLT) 114.20p 3.27%

FTSE 250 - Fallers

Genus (GNS) 2,246.00p -5.87%
Daejan Holdings (DJAN) 5,600.00p -5.56%
IP Group (IPO) 107.60p -5.45%
Thomas Cook Group (TCG) 30.90p -5.39%
NewRiver REIT (NRR) 212.50p -4.30%
HGCapital Trust (HGT) 1,790.00p -4.28%
Stobart Group Ltd. (STOB) 153.40p -4.24%
Euromoney Institutional Investor (ERM) 1,230.00p -4.00%
TI Fluid Systems (TIFS) 175.00p -3.95%
B&M European Value Retail S.A. (DI) (BME) 324.60p -3.16%