London midday: FTSE holds head above water as investors eye payrolls

London stocks moved higher by midday on Friday, reversing earlier small losses as the pound slipped, but gains were marginal amid mounting geopolitical tensions and ahead of the release of the US non-farm payrolls report.

The FTSE 100 was up 0.1% to 7,312.52, holding up well considering the backdrop and faring better than its European counterparts, most likely due to the weakening of the pound, which tends to benefit the index as around 70% of its constituents derive their earnings from overseas.

Sterling was down 0.5% against the dollar at 1.2414 after disappointing data on the UK construction and manufacturing sectors.

Figures from the Office for National Statistics showed industrial and manufacturing output unexpectedly worsened in February, while construction activity fell sharply.

Industrial production dropped 0.7% month-on-month, on top of a revised 0.3% decline the month before and missing the consensus forecast for a 0.2% rise.

Year on year this meant growth slowed to 2.8%, versus the 3.7% expected rise from the revised 3.3% rate in January.

Manufacturing production slipped 0.1% month-on-month, which was an improvement on the 1% fall the previous month but below the 0.3% increase the market was expecting.

Output in the construction industry fell by 1.7% on a seasonally-adjusted basis, missing expectations for a 0.1% increase.

Meanwhile, oil prices gained ground on the back of the US missile strike amid concerns about disruption to supply in the region, with West Texas Intermediate up 1.2% to $52.31 a barrel and Brent crude 1% higher at $55.46.

Gold and silver prices were up more than 1% while the yen rallied as investors opted for safe haven assets. The yellow metal rose to a fresh five-month high of $1,269 an ounce following news of the air strike.

Precious metals miners Randgold Resources and Fresnillo advanced, while Royal Dutch Shell also gushed higher.

Market participants were exercising caution after a US airstrike early on Friday left a Syrian airfield almost completely destroyed. US President Donald Trump said he ordered the missile strikes following the deadly chemical attack that took place earlier in the week.

US Secretary of State Rex Tillerson said late on Thursday that there was "no doubt" Syrian President Bashar Assad was behind the poison gas attack that killed dozens of Syrian civilians, with officials insisting the retaliation was a "one off" measure rather than the beginning of a larger action.

Investors were also likely reluctant to make any big bets either way ahead of the non-farm payrolls report and the unemployment rate at 1330 BST.

London Capital Group analyst Ipek Ozkardeskaya said: "The US economy is expected to have added 174,000 non-farm jobs in March, versus 235,000 reported previously. The expectations are soft, given that the last 12-month average stands at 185,000."

In corporate news, oilfield services provider Hunting was on the front foot after saying its chief executive Dennis Proctor will step down from the role in 2017 once a replacement has been appointed.

Model train maker Hornby surged after saying it had completed the first phase of its turnaround plan.

Aberdeen Asset Management and Standard Life got a boost after rating upgrades from RBC Capital Markets, while Ocado slumped as UBS cut the stock to 'sell' from 'buy'.

Market Movers

FTSE 100 (UKX) 7,312.52 0.13%
FTSE 250 (MCX) 19,182.04 0.29%
techMARK (TASX) 3,424.85 0.07%

FTSE 100 - Risers

Randgold Resources Ltd. (RRS) 7,300.00p 2.74%
Mediclinic International (MDC) 700.00p 2.41%
Standard Life (SL.) 362.60p 1.91%
Sainsbury (J) (SBRY) 259.00p 1.81%
British Land Company (BLND) 647.00p 1.73%
Fresnillo (FRES) 1,620.00p 1.63%
Tesco (TSCO) 188.05p 1.54%
BAE Systems (BA.) 643.00p 1.42%
Royal Dutch Shell 'B' (RDSB) 2,231.50p 1.09%
Royal Dutch Shell 'A' (RDSA) 2,138.00p 1.06%

FTSE 100 - Fallers

Rio Tinto (RIO) 3,195.00p -1.92%
Anglo American (AAL) 1,225.00p -1.61%
Glencore (GLEN) 315.05p -1.35%
ITV (ITV) 213.90p -1.29%
BT Group (BT.A) 310.50p -1.18%
Next (NXT) 3,995.00p -1.16%
Shire Plc (SHP) 4,553.50p -1.09%
Barclays (BARC) 214.20p -1.02%
Wolseley (WOS) 4,907.00p -0.97%
Antofagasta (ANTO) 854.00p -0.81%

FTSE 250 - Risers

Cairn Energy (CNE) 210.90p 3.84%
Hunting (HTG) 605.50p 2.98%
Aberdeen Asset Management (ADN) 274.70p 2.77%
McCarthy & Stone (MCS) 189.40p 2.77%
Indivior (INDV) 324.30p 2.56%
Sophos Group (SOPH) 327.00p 2.54%
Polymetal International (POLY) 1,061.00p 2.51%
Safestore Holdings (SAFE) 398.80p 2.10%
Tullow Oil (TLW) 216.20p 1.89%
Entertainment One Limited (ETO) 241.90p 1.77%

FTSE 250 - Fallers

Ocado Group (OCDO) 237.40p -5.79%
Evraz (EVR) 231.70p -2.89%
Redefine International (RDI) 36.78p -2.65%
Allied Minds (ALM) 171.50p -2.00%
Vedanta Resources (VED) 812.00p -1.93%
CLS Holdings (CLI) 1,895.00p -1.86%
Ferrexpo (FXPO) 168.00p -1.58%
Kaz Minerals (KAZ) 474.30p -1.58%
Rotork (ROR) 249.60p -1.19%
Homeserve (HSV) 625.00p -1.19%