London midday: FTSE in the black but underperforming peers after employment data

Stocks in London appeared to be headed for their first gain in five days following an employment report that economists described as a "mixed bag" - or worse - and with M&A news underpinning sentiment.

At midday, the FTSE was up 0.60% to 6,312.69, while the Stoxx Europe 600 index was 0.91% higher at 379.68 and Germany's Dax was up 1.39% to 10,982.14.

Something for hawks and doves in UK employment data

Unemployment in the UK unexpectedly slipped to 5.3% over the three months to September, the lowest level since April 2008. However, the rate of growth in average earnings remained stuck at 3.0% year-on-year, compared with consensus expectations of 3.2%.

So-called 'core' earnings were weaker still, falling to 2.5% from 2.8% in August, against consensus of 2.6%.

"Today’s labour market release was a mixed bag, with stronger employment growth offset by softer earnings. The good news was that the headline unemployment rate fell.

"We think the weaker-than-expected earnings growth will prove very temporary; indeed, a range of measures confirm that the labour market is tightening and that will drive wage growth higher," Daniel Vernazza, lead UK economist at Unicredit said in a research note sent to clients.

Barclays appeared to be more downbeat, pointing out how "the Bank of England Agents’ Report shows a marked decline in employment expectations over the next six months in both consumer services and manufacturing, with business services employment expectations flat."

"If our inflation forecasts are realised and core wage growth does not pick up and at an increasing rate, we could begin to see real wages dip further, eating into consumption, supporting our view that private consumption will slow into H2 15 and 2016."

Slightly better-than-expected figures on investment and retail sales in China for the month gave equities a helping hand as well.

However, it remained to be seen if economists would be sufficiently convinced of the sustainability of any such improvement in the prospects for Asia's largest economy.

Julian Evans-Pritchard, China economist at Capital Economics, said: "The rebound in fixed investment growth last month suggest that the recent easing of monetary and fiscal policy is beginning to have the desired effect. With policymakers likely to err on this side of caution and continue to adopt an accommodative policy stance, we expect this tailwind to economic activity to last for some time."

Fixed asset investment in Asia's largest economy rose at a 10.2% year-on-year pace in the first ten months of the year, according to the country's statistics bureau, in line with the consensus estimate from economists.

ECB will not move before the US Federal Reserve?

Speaking on Tuesday evening, Adam Posen, the president of the Peterson Institute for International Economics told CNBC the ECB would not boost QE before the US Fed hikes interest rates.

SAB Miller and Anheuser Busch-InBev seal takeover

Anheuser Busch-InBev made a formal offer to buy London-listed rival SABMiller for £44 a share in cash, the companies confirmed on Wednesday. The deal, which is expected to complete in the second half of next year and follows months of negotiations and extended deadlines from the Takeover Panel, represents a premium of around 50% to SABMiller’s closing price prior to renewed speculation of an approach.

Interim results from Sainsbury's showed like-for-like sales shrank 1.6% and profits crashing 17.9% lower to £308m but ahead of consensus estimates of £300m. Underlying earnings per share tumbled 17.2% to 12p, but were also ahead of forecasts of 11.5p.

Housebuilder Barratt said net private reservations per week in the 19 weeks to 8 November were up 12.5% to 261 with a sales rate of 0.70 (2014: 0.63) net private reservations per active site per week against 0.63 last year. Total forward sales, including joint ventures , rose by 20.7% to £2.5bn. The company said it was “on track to deliver further good progress in FY16”.

SSE saw adjusted profits jump in the first half of the year, driven by revenue from its wholesale energy portfolio management and electricity generation division. Revenue rose from £12.4bn in 2014 to £13.8bn, an 11% jump from 2014 and ahead of consensus estimates for £12.5bn.

FTSE 250: TalkTalk jumps

TalkTalk estimated the one-off financial impact of the cyber attack that occurred in October at between £30m and £35m. The telecommunications company said earnings before interest, tax, depreciation and amortisation fell to £90m from £110m, missing expectations of around £98m. However, it raised its interim dividend 15% from last year to 5.29p – a move that surprised analysts and investors who had been expecting a cut.

Tullett Prebon has agreed to buy rival inter-dealer brokes Icap's hybrid voice broking and information business in an all-shares deal. Tullett will issue a parcel of new shares greater than its current share capital such that once the deal is completed, Icap shareholders will own 36.1% of its rival, existing Tullett shareholders will own 44% of the enlarged company and the remainder will be owned by a new holding company of the Icap business.

Egyptian gold miner Centamin kept production levels up in the third quarter but rising cash costs and a falling gold price led to a crunch on profits. Gold production from the Sukari field in the three months to 30 September reached 105,413 ounces, which was up 13% on the same period last year and line with the second quarter of 2015. But the cost of this production climbed to $767 per ounce and all-in sustaining costs to $918 per ounce, versus the $706 cash and $853 all-in costs in the previous quarter.

Great Portland Estates posted a 15.7% rise in first half pre-tax profit and a 14% jump in net asset value per share on the back of solid leasing activity. NAV per share rose to 808p in the six months to the end of September, while pre-tax profit came it at £24.3m, largely reflecting the acquisition of Starwood Capital’s interest in GSP and development management profits at 12/14 New Fetter Lane in London.

Market Movers

FTSE 100 (UKX) 6,310.03 0.55%
FTSE 250 (MCX) 17,106.11 0.39%
techMARK (TASX) 3,105.57 1.05%

FTSE 100 - Risers

Experian (EXPN) 1,227.00p 3.37%
SABMiller (SAB) 4,084.50p 2.73%
Rolls-Royce Holdings (RR.) 685.00p 1.93%
Shire Plc (SHP) 4,762.00p 1.86%
Carnival (CCL) 3,618.00p 1.80%
BT Group (BT.A) 473.75p 1.77%
Intertek Group (ITRK) 2,578.00p 1.74%
Babcock International Group (BAB) 974.50p 1.67%
Ashtead Group (AHT) 1,016.00p 1.65%
St James's Place (STJ) 962.50p 1.64%

FTSE 100 - Fallers

Sainsbury (J) (SBRY) 261.60p -4.04%
Barratt Developments (BDEV) 564.50p -1.91%
Tesco (TSCO) 172.20p -1.74%
Persimmon (PSN) 1,845.00p -1.60%
SSE (SSE) 1,469.00p -1.54%
Morrison (Wm) Supermarkets (MRW) 157.60p -1.19%
Land Securities Group (LAND) 1,232.00p -0.88%
BHP Billiton (BLT) 938.50p -0.85%
British Land Company (BLND) 814.50p -0.79%
Royal Dutch Shell 'A' (RDSA) 1,673.50p -0.74%

FTSE 250 - Risers

TalkTalk Telecom Group (TALK) 240.70p 10.77%
Sophos Group (SOPH) 270.10p 7.27%
Ophir Energy (OPHR) 100.00p 5.99%
ICAP (IAP) 497.40p 5.45%
Ultra Electronics Holdings (ULE) 1,802.00p 3.27%
Just Eat (JE.) 454.00p 3.16%
DCC (DCC) 5,940.00p 2.50%
Indivior (INDV) 200.00p 2.25%
Man Group (EMG) 168.20p 2.25%
BTG (BTG) 532.00p 2.21%

FTSE 250 - Fallers

Tullett Prebon (TLPR) 330.30p -7.99%
Petra Diamonds Ltd.(DI) (PDL) 60.65p -6.55%
Tullow Oil (TLW) 201.30p -5.76%
Premier Oil (PMO) 70.80p -4.26%
Centamin (DI) (CEY) 60.00p -4.15%
Hunting (HTG) 335.50p -2.73%
Home Retail Group (HOME) 100.80p -2.70%
SIG (SHI) 123.40p -2.45%
Galliford Try (GFRD) 1,368.00p -2.29%
P2P Global Investments C (P2P2) 958.00p -2.24%