London open: Stocks recover as investors eye non-farm payrolls
London stocks rose in early trade on Friday to recoup some of the heavy losses a day after the top-flight index closed at its worst level since the Brexit referendum, with US non-farm payrolls also coming in focus.
At 0840 GMT, the FTSE 100 was up 1% to 6,770.70, having closed down 3.2% at 6,704.05 a day earlier as the arrest of Huawei’s chief financial officer sparked renewed concerns about Sino-US relations and a global selloff.
However, a late recovery on Wall Street provided a boost for European markets.
In currency markets, the pound was down 0.2% against the dollar and the euro at 1.2756 and 1.1212.
Despite the upbeat open, Neil Wilson, chief market analyst at Markets.com, said there is still lots of pressure on the UK: "For the FTSE this is about more than trade wars and the Fed, there is a real political risk premium being factored into shares now as we approach the Brexit crunch.
"In particular, the UK is increasingly reflecting the risk of a General Election and Labour-led government. Investors have not really been trading on the Corbyn effect too much to date, but there is a risk associated with a Labour government given their stated policies. So, the weak pound, strong FTSE correlation is breaking down, indeed as it has done for a while now."
Market participants will be eyeing the latest US non-farm payrolls report and unemployment rate at 1330 GMT.
"All eyes on the nonfarm payrolls figures today with the focus very much on the US yield curve. Do we get a strong print on wages (in particular as these are more important for inflation), that helps lift yields? Would a strong print also allay concerns about a slowdown in the US economy? Look for the NFP number to come in at 200k, a slowdown from the 250k a month ago," said Wilson.
Meanwhile, wages should come in above 3%, having hit a decade high of 3.1% last time.
"The problem is that firming wages and job creation, whilst it may allay fears the US economy is slowing, only makes it more likely the Fed will stick to its hiking schedule," Wilson said, adding that market expectations are now starting to price in only one hike next year.
In corporate news, 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 also on the front foot after saying first-half results were 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 company 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.
In broker note action, IP Group was battered by a downgrade to ‘underperform’ at Jefferies, while Centamin lost its shine after a downgrade to ‘hold’ at Berenberg and Rotork was boosted by an upgrade to ‘neutral’ at Credit Suisse.
FTSE 100 - Risers
Scottish Mortgage Inv Trust (SMT) 481.08p 3.90%
Just Eat (JE.) 552.60p 3.29%
Tesco (TSCO) 199.90p 3.17%
NMC Health (NMC) 3,206.00p 2.82%
Hargreaves Lansdown (HL.) 1,866.50p 2.67%
Burberry Group (BRBY) 1,759.00p 2.60%
Melrose Industries (MRO) 160.55p 2.59%
InterContinental Hotels Group (IHG) 4,173.00p 2.53%
Ocado Group (OCDO) 809.93p 2.42%
Sage Group (SGE) 585.80p 2.41%
FTSE 100 - Fallers
Associated British Foods (ABF) 2,298.00p -2.21%
Shire Plc (SHP) 4,534.50p -1.64%
RSA Insurance Group (RSA) 505.60p -0.43%
Marks & Spencer Group (MKS) 282.60p -0.14%
HSBC Holdings (HSBA) 635.60p -0.13%
AstraZeneca (AZN) 5,963.00p 0.13%
Severn Trent (SVT) 1,856.50p 0.16%
Imperial Brands (IMB) 2,355.50p 0.17%
Johnson Matthey (JMAT) 2,660.00p 0.23%
Standard Life Aberdeen (SLA) 239.00p 0.38%
FTSE 250 - Risers
Games Workshop Group (GAW) 3,159.10p 5.48%
Vivo Energy (VVO) 118.12p 4.25%
Premier Oil (PMO) 68.85p 4.16%
Charter Court Financial Services Group (CCFS) 240.76p 3.77%
Tullow Oil (TLW) 181.70p 2.95%
Auto Trader Group (AUTO) 430.10p 2.87%
Avast (AVST) 270.00p 2.60%
Senior (SNR) 222.40p 2.49%
Dunelm Group (DNLM) 624.00p 2.46%
Hilton Food Group (HFG) 925.48p 2.38%
FTSE 250 - Fallers
IP Group (IPO) 106.20p -6.68%
Thomas Cook Group (TCG) 31.16p -4.60%
BTG (BTG) 828.50p -2.87%
IMI (IMI) 887.00p -2.79%
Rank Group (RNK) 138.20p -2.40%
Plus500 Ltd (DI) (PLUS) 1,384.00p -2.19%
Genus (GNS) 2,344.00p -1.76%
Indivior (INDV) 81.66p -1.57%
TI Fluid Systems (TIFS) 180.10p -1.15%
Centamin (DI) (CEY) 98.14p -1.15%