London midday: Stocks extend gains as miners jump; payrolls in focus

London stocks had extended gains by midday on Friday, with miners boosted by speculation that China may ease Covid restrictions, as investors eyed the latest US non-farm payrolls report.

The FTSE 100 was 1.3% higher at 7,282.41, while the pound was up 0.5% against the dollar at 1.1217, having tumbled on Thursday ahead of the Bank of England’s policy announcement.

Richard Hunter, head of markets at Interactive Investor, said the payrolls report - which will be the next test for investors’ mettle - is almost seen as a no-win scenario.

"If the expected number of 200,000 jobs being added is exceeded and the unemployment rate more or less unchanged, this will add further fuel to the Fed’s policy," he said.

"This is despite the fact that the release would signal a drop from the previous month’s reading of 263000, with the simple reality being that until unemployment begins to rise and the consumer therefore spends less, a lessening of inflation could remain out of reach."

The payrolls report for October is due at 1230 GMT, along with the unemployment rate and average earnings.

In equity markets, miners were the standout gainers as copper prices rose, with Anglo American, Rio, Glencore and Antofagasta all up. The sector was boosted by more speculation that China might relax its Covid restrictions. Asia-focused Prudential was also sharply higher.

Victoria Scholar, head of investment at Interactive Investor, said: "The Hang Seng in Hong Kong has rallied by more than 5% overnight with the Hang Seng property and tech indices surged by more than 10% at one stage.

"The HSI logged its best weekly gain since November 2011 amid speculation that some of China’s strict Covid rules that have sharply weighed on its economy could be set to ease in the coming months. So far, the speculation is only based on social media rumours with China’s foreign ministry commenting that it is not aware of the issue."

Also lifting sentiment was a report suggesting that China is working on plans to scrap a system that penalises airlines for bringing virus cases into the country. Bloomberg cited people familiar with the matter as saying that the State Council, which oversees China’s bureaucracy, recently asked government agencies including the civil aviation regulator to prepare for ending the so-called circuit-breaker mechanism.

Elsewhere, Morgan Advanced Materials surged more than 15% after it lifted its profit and revenue guidance as sales for the first nine months of the year rose 10.5%.

4imprint also racked up impressive gains after upgrading its revenue guidance for 2022 to around $1.1bn from $1bn and saying that profit was set to be at the top end of market expectations.

On the downside, Sainsbury’s was knocked lower by a downgrade to ‘neutral’ at Exane.

Market Movers

FTSE 100 (UKX) 7,282.41 1.30%
FTSE 250 (MCX) 18,200.03 0.50%
techMARK (TASX) 4,272.39 0.44%

FTSE 100 - Risers

Anglo American (AAL) 2,873.50p 8.19%
Prudential (PRU) 900.60p 7.42%
Antofagasta (ANTO) 1,256.50p 6.39%
Rio Tinto (RIO) 4,955.50p 6.00%
Rolls-Royce Holdings (RR.) 83.79p 4.53%
Endeavour Mining (EDV) 1,524.00p 4.24%
Glencore (GLEN) 538.00p 3.66%
Intertek Group (ITRK) 3,741.00p 3.37%
HSBC Holdings (HSBA) 477.65p 3.13%
Standard Chartered (STAN) 548.40p 2.81%

FTSE 100 - Fallers

BAE Systems (BA.) 808.20p -1.85%
RS Group (RS1) 870.00p -1.69%
Sainsbury (J) (SBRY) 208.50p -1.47%
Reckitt Benckiser Group (RKT) 5,686.00p -1.04%
Tesco (TSCO) 220.80p -0.99%
Admiral Group (ADM) 1,977.50p -0.88%
Entain (ENT) 1,269.00p -0.39%
British American Tobacco (BATS) 3,337.50p -0.37%
Relx plc (REL) 2,309.00p -0.26%
Aveva Group (AVV) 3,137.00p -0.25%

FTSE 250 - Risers

Morgan Advanced Materials (MGAM) 280.00p 15.23%
Synthomer (SYNT) 121.40p 6.96%
4Imprint Group (FOUR) 3,810.00p 6.57%
Mitchells & Butlers (MAB) 134.00p 5.26%
Fidelity China Special Situations (FCSS) 202.00p 4.99%
Watches of Switzerland Group (WOSG) 868.00p 4.58%
Aston Martin Lagonda Global Holdings (AML) 109.50p 4.29%
Balanced Commercial Property Trust Limited (BCPT) 90.20p 4.28%
Darktrace (DARK) 356.80p 4.08%
Hochschild Mining (HOC) 53.40p 3.69%

FTSE 250 - Fallers

Beazley (BEZ) 625.50p -3.55%
National Express Group (NEX) 167.20p -2.68%
Chemring Group (CHG) 304.00p -2.25%
Man Group (EMG) 216.00p -1.86%
VinaCapital Vietnam Opportunity Fund Ltd. (VOF) 419.00p -1.64%
GCP Infrastructure Investments Ltd (GCP) 93.50p -1.58%
Assura (AGR) 55.20p -1.52%
NextEnergy Solar Fund Limited Red (NESF) 104.20p -1.51%
HICL Infrastructure (HICL) 161.80p -1.46%
Cranswick (CWK) 2,908.00p -1.42%