London midday: Stocks flatten out ahead of payrolls; G4S surges

London stocks had flattened out by midday on Friday as investors refrained from making any big bets either way ahead of the release of the latest US non-farm payrolls report.

The FTSE 100 was down steady at 7,270.76, while the pound was 0.3% lower versus the dollar and the euro at 1.2300 and 1.1150, respectively. The Footsie fell on Thursday, missing out on the broader rally in markets - which was fuelled by optimism over Sino-US trade talks - as sterling hit a five-week high on expectations of a Brexit delay.

Sticking with Brexit, it was looking increasingly unlikely that Prime Minister Boris Johnson would secure an early election on his terms, as opposition parties confirmed they would not support a motion for a snap general election if it was tabled by the government on Monday.

Both Labour and the Scottish National Party said they would not allow Johnson to dictate the timing of any election.

Labour's shadow foreign secretary Emily Thornberry said Johnson could not be trusted to ensure that no-deal had been ruled out before going to the polls.

"The problem that we have is that … if we vote to have a general election, then no matter what it is that Boris Johnson promises, it is up to him to advise the Queen when the general election should be," she told the BBC.

IG market analyst Joshua Mahony said: "For sterling bulls the hope is that an election is pushed further into the future, with impending legislation forcing Boris Johnson to request an extension to article 50."

However, a no-deal Brexit remains a highly probable event, he said, with any coalition including the Brexit Party likely to see a no-deal take centre stage once again.

"While markets are hoping to see the election and Brexit deadline shifted back, the fear is that the Brexit Party will gain a greater share of the vote should such a delay occur."

Away from Brexit but still on home turf, investors were mulling the latest house price data from lender Halifax, which showed that prices ticked up a touch more than expected in August as a lack of supply helped to offset the impact of Brexit uncertainty.

Prices rose 0.3% on the month in August compared to a 0.4% increase in July, beating expectations for a 0.2% jump.

On the year, prices were up 1.8% compared to a 1.5% rise in July but falling well short of expectations for a 3.4% increase.

Managing director Russell Galley said the monthly increase further extends "the predominantly flat trend" seen over the last six months, with the average house price having barely changed since March.

"While ongoing economic uncertainty continues to weigh on consumer sentiment - with evidence of both buyers and sellers exercising some caution - a number of important underlying factors such as affordability and employment remain strong.

"Although the housing market will undoubtedly be influenced by events in the wider economy, it continues to show a degree of resilience for the time being. We should also not lose sight of the fact that the single biggest driver of both prices and activity over the longer-term remains the dearth of available properties to meet demand from buyers."

Market participants were also digesting news that the People's Bank of China was cutting the amount of cash that banks need to hold as reserves for the third time this year, by 50 basis points.

Still to come, attention will shift to the release of the US non-farm payrolls report, unemployment rate and average earnings, all due at 1330 BST.

CMC Markets analyst Michael Hewson said: "With US manufacturing apparently in recession and yet ADP payrolls growth showing reasonable levels of strength across small, medium and large business, it's difficult to gauge whether the US economy is heading towards a recession next year, or merely a slowdown.

"A better-than-expected August ADP payrolls report of 195k yesterday, along with a similarly positive non-farm payrolls report today is likely to pose a headache for Fed officials later this month, when they meet to discuss what to do with interest rates at their next meeting."

In equity markets, house builder Berkeley was in the green as it said first-quarter market conditions in London and the South East had remained robust, although Brexit worries and high transaction costs were constraining the wider market. Shares of Barratt Developments also rose.

G4S surged after Sky News reported that US cash-handling business The Brink's Company could make a £1bn bid for the security services firm's cash solutions arm.

Mining engineer Weir Group rallied after saying it had won a £100m order to provide crushing and pump equipment to the Iron Bridge magnetite project in the Pilbara region of Western Australia.

On the downside, SIG slumped as it first-half pre-tax profit fell to £5.2m from £19.6m in the same period a year ago amid a marked deterioration in the level of construction activity in the UK.

Market Movers

FTSE 100 (UKX) 7,270.76 -0.01%
FTSE 250 (MCX) 19,636.04 -0.07%
techMARK (TASX) 3,853.01 0.30%

FTSE 100 - Risers

Smurfit Kappa Group (SKG) 2,586.00p 2.54%
Berkeley Group Holdings (The) (BKG) 3,958.00p 2.19%
Croda International (CRDA) 4,776.76p 1.76%
Melrose Industries (MRO) 204.70p 1.44%
Rentokil Initial (RTO) 463.50p 1.33%
Hargreaves Lansdown (HL.) 1,976.50p 1.33%
London Stock Exchange Group (LSE) 7,300.00p 1.28%
Experian (EXPN) 2,618.00p 1.24%
Barratt Developments (BDEV) 614.60p 1.22%
Pearson (PSON) 856.00p 1.21%

FTSE 100 - Fallers

Centrica (CNA) 66.70p -3.47%
United Utilities Group (UU.) 781.60p -3.24%
Severn Trent (SVT) 2,016.48p -2.21%
SSE (SSE) 1,145.11p -2.00%
Diageo (DGE) 3,430.00p -1.69%
Fresnillo (FRES) 711.15p -1.64%
Taylor Wimpey (TW.) 149.40p -1.55%
Royal Bank of Scotland Group (RBS) 187.80p -1.39%
Prudential (PRU) 1,404.50p -1.30%
National Grid (NG.) 834.80p -1.24%

FTSE 250 - Risers

G4S (GFS) 188.00p 7.31%
Vivo Energy (VVO) 128.00p 3.73%
Syncona Limited NPV (SYNC) 251.50p 3.50%
Dunelm Group (DNLM) 850.00p 3.09%
Sanne Group (SNN) 547.00p 3.01%
Apax Global Alpha Limited (APAX) 157.00p 2.61%
Sophos Group (SOPH) 396.40p 2.19%
Moneysupermarket.com Group (MONY) 375.70p 2.01%
Bodycote (BOY) 717.50p 1.99%
Dechra Pharmaceuticals (DPH) 3,022.00p 1.61%

FTSE 250 - Fallers

SIG (SHI) 122.70p -4.96%
Barr (A.G.) (BAG) 586.43p -4.34%
Tullow Oil (TLW) 210.10p -4.06%
Contour Global (GLO) 178.20p -3.15%
Metro Bank (MTRO) 265.75p -3.01%
Grafton Group Units (GFTU) 755.00p -2.71%
Ferrexpo (FXPO) 193.65p -2.69%
Hochschild Mining (HOC) 205.40p -2.56%
Restaurant Group (RTN) 127.20p -2.45%
Wizz Air Holdings (WIZZ) 3,568.00p -2.22%