London close: Investors opt for caution ahead of Italian referendum

London stocks slipped at the end of the week after a weak monthly US non-farm payrolls report and as investors sought out the safety of government bonds ahead of the coming weekend´s Constitutional referendum in Italy.

The FTSE 100 ended the session lower by 0.33% or 22.21 points to 6,730.72, having surrendered 110.03 points over the length of the entire week.

Employers in the States added 178,000 jobs in November (consensus: 180,000). However, the rate of growth in average hourly earnings fell back from a 2.8% year-on-year clip to 2.5%.

"Overall and in our view, this report easily clears the bar for a December rate hike and represents some of the continued progress towards the dual mandate that the committee desires. Of course, the committee could decide that the tightening of financial conditions since September are sufficiently large to forestall a hike but we consider that to be very unlikely at this point," Michael Gapen and Rob Martin at Barclays said in a research note sent to clients.

For their part, strategists at Credit Suisse appeared to be down right optimistic when it came to the possible implications of a 'soft-No'result in the upcoming Italian referendum.

"After a few days or weeks of uncertainty, we believe that the most likely outcome would be for the current government to be reconvened or – in the case of new elections by, say, mid-2017 – Renzi could be re-appointed with a clearer popular mandate.

"Overall, while we expect volatility in the short term, we don’t expect uncertainty to last for longer than a few weeks, in most scenarios – and we continue to view the risk of "Exitaly" to be close to 1%."

On this side of the Channel, data showed the UK construction sector expanded further in November with business activity and incoming new work increasing at the strongest pace in eight months.

To take note of too, Bank of England chief economist Andy Haldane said Bank Rate was now as likely to rise as too fall, given the resilience shown by the economy.

Nonetheless, he cautioned against the temptation of hasty rate increases.

"If the economy weakens and more stimulus is required, there is a risk that the so-called zero lower bound on interest rates may constrain room for maneuver, Haldane said. BOE staff have conducted simulations to assess the probability of this in the future and put it in the range of 15-40 percent," he explained.

Among corporate stocks, property shares were boosted by the better-than-forecast UK construction PMI data. Land Securities, British Land and Hammerson rallied.

Berkeley Group was also on the front foot after the property developer reported an increase in first half earnings and revenue that beat forecasts.

Heading in the opposite direction, Laird plummeted after proposing to raise £185m through a rights issue and scrapping its final dividend in a bid to strengthen its financial position.

Mining stocks were under the cosh, including BHP Billiton, Antofagasta and Rio Tinto, as copper and silver prices fell. As of 1715 GMT March 2017 copper futures on COMEX were down by 0.81% to $2.6215 per pound.

To take note of, referencing the latest CFTC data analysts at Morgan Stanley pointed out how net long positioning in copper had reached an all-time high of 3.3 standard deviations versus the three-year average.

Market Movers

FTSE 100 (UKX) 6,730.72 -0.33%
FTSE 250 (MCX) 17,435.28 -0.35%
techMARK (TASX) 3,218.08 0.05%

FTSE 100 - Risers

Land Securities Group (LAND) 959.50p 2.18%
Randgold Resources Ltd. (RRS) 5,825.00p 2.10%
Royal Mail (RMG) 464.20p 1.98%
Barratt Developments (BDEV) 475.30p 1.67%
SSE (SSE) 1,478.00p 1.65%
BT Group (BT.A) 358.60p 1.53%
Imperial Brands (IMB) 3,395.50p 1.51%
Associated British Foods (ABF) 2,576.00p 1.38%
Fresnillo (FRES) 1,198.00p 1.35%
Capita (CPI) 542.00p 1.31%

FTSE 100 - Fallers

Royal Bank of Scotland Group (RBS) 193.40p -3.15%
Rolls-Royce Holdings (RR.) 661.00p -3.08%
Barclays (BARC) 212.95p -2.78%
BHP Billiton (BLT) 1,304.00p -2.61%
easyJet (EZJ) 970.50p -2.61%
TUI AG Reg Shs (DI) (TUI) 1,035.00p -2.17%
Glencore (GLEN) 277.90p -1.99%
CRH (CRH) 2,575.00p -1.90%
ITV (ITV) 166.90p -1.82%
Antofagasta (ANTO) 693.50p -1.70%

FTSE 250 - Risers

Berkeley Group Holdings (The) (BKG) 2,760.00p 8.45%
Hochschild Mining (HOC) 223.90p 4.92%
DFS Furniture (DFS) 223.60p 3.81%
Rank Group (RNK) 197.60p 2.92%
Hunting (HTG) 596.00p 2.76%
Kennedy Wilson Europe Real Estate (KWE) 993.00p 2.43%
Aberdeen Asset Management (ADN) 272.40p 2.33%
Acacia Mining (ACA) 400.70p 2.22%
BGEO Group (BGEO) 3,100.00p 2.04%
HICL Infrastructure Company Ltd (HICL) 162.70p 1.94%

FTSE 250 - Fallers

Laird (LRD) 138.10p -8.84%
Evraz (EVR) 228.90p -6.34%
Aggreko (AGK) 809.00p -4.32%
GVC Holdings (GVC) 629.50p -4.19%
Paysafe Group (PAYS) 359.90p -3.92%
Euromoney Institutional Investor (ERM) 1,144.00p -3.53%
Playtech (PTEC) 811.50p -2.76%
FirstGroup (FGP) 100.80p -2.61%
Dignity (DTY) 2,408.00p -2.55%
Dechra Pharmaceuticals (DPH) 1,251.00p -2.28%