London midday: Stocks fall on US election uncertainty as traders await non-farm payrolls

London stocks declined on Friday as investors took a cautious approach ahead of the US non-farm payrolls report and amid an increasingly tight race in the US election.

The FTSE 100 dropped 1.28% to 6,703.38 points.

The non-farm payrolls report, released at 1230 GMT, is expected to show US employers added 175,000 jobs in October after 156,000 in September. The unemployment rate is forecast to fall to 4.9% from 5.0%.

Accendo Markets analysts Mike van Dulken and Henry Croft said: “In focus today on the data front will be US Non-Farm Payrolls, given the US Fed having said that the case for a rate rise has continues to strengthen, but that it would like to see further evidence. Could today’s jobs report take us a step closer to a December rate hike, like last year?

“An NFP print of 100-200K (consensus 175K) will likely be taken as rate rise positive, especially if unemployment drops back to its summer lows of 4.9%. As always, with inflation as the other half of the Fed’s dual mandate keep an eye on any improvement in earnings that would be supportive.”

In other US news, the latest polls showed a close race between presidential candidates Hillary Clinton and Donald Trump ahead of the election on 8 November.

Support for Democratic party contender Clinton is at 44.4% compared to 43.9% for Republican party candidate Trump, according to the latest IDB/TIPP poll.

“The prospect of a Trump presidency, however unlikely that still may be, has sent the FTSE down a further 50 points this morning, taking the UK index to its lowest level since mid-September,” said Connor Campbell, financial analyst at Spreadex.

Meanwhile, the pound held on to gains from the previous session when the Bank of England kept policy unchanged and the High Court ruled that Parliament must vote on whether to trigger Article 50, which kicks off the formal Brexit process.

The pound rose 0.26% versus the dollar to $1.2495 at 1146 GMT.

On the company front, Hikma Pharmaceutical slumped as Numis upgraded its rating to ‘buy’ from ‘hold’ but cut its target price to 2,350p from 2,660p as it slashed its earnings per share forecast for 2017.

Paddy Power Betfair rallied as it reported a 25% jump in third quarter revenue to £404m, driven by sports betting, including a strong conclusion to the Euro 2016 tournament.

British Airways and Iberia parent International Consolidated Airlines Group flew lower after it cut its target for average annual earnings before interest, taxes depreciation, amortisation and rental costs to around €5.3bn from 5.6bn previously.

Tullett Prebon advanced as it reported a 15% jump in third-quarter revenue after it got a boost from the weaker pound, with 60% of group revenues denominated in US dollars.

DFS shares slid as US private equity firm Advent International cut its stake in the furniture retailer by half.

Market Movers

FTSE 100 (UKX) 6,703.38 -1.28%
FTSE 250 (MCX) 17,283.07 -1.70%
techMARK (TASX) 3,270.64 -1.13%

FTSE 100 - Risers

Paddy Power Betfair (PPB) 8,905.00p 3.79%
SSE (SSE) 1,581.00p 1.15%
United Utilities Group (UU.) 930.50p 0.92%
National Grid (NG.) 1,027.00p 0.64%
Rolls-Royce Holdings (RR.) 711.00p 0.49%
Severn Trent (SVT) 2,274.00p 0.40%
BAE Systems (BA.) 534.50p 0.00%
Experian (EXPN) 1,499.00p -0.20%
Diageo (DGE) 2,065.00p -0.27%
Unilever (ULVR) 3,343.00p -0.36%

FTSE 100 - Fallers

Hikma Pharmaceuticals (HIK) 1,653.00p -5.27%
Persimmon (PSN) 1,681.00p -4.38%
Taylor Wimpey (TW.) 140.80p -4.28%
International Consolidated Airlines Group SA (CDI) (IAG) 431.60p -4.26%
Dixons Carphone (DC.) 327.20p -4.19%
Randgold Resources Ltd. (RRS) 6,855.00p -3.59%
Barratt Developments (BDEV) 452.70p -3.48%
Shire Plc (SHP) 4,402.00p -3.02%
Royal Bank of Scotland Group (RBS) 188.10p -2.99%
Whitbread (WTB) 3,573.00p -2.99%

FTSE 250 - Risers

Tullett Prebon (TLPR) 382.50p 4.05%
CYBG (CYBG) 280.50p 2.04%
Pennon Group (PNN) 815.00p 1.24%
Aggreko (AGK) 797.50p 1.14%
ICAP (IAP) 479.10p 1.03%
Supergroup (SGP) 1,420.00p 0.92%
Laird (LRD) 136.00p 0.82%
Barr (A.G.) (BAG) 498.30p 0.26%
CLS Holdings (CLI) 1,597.00p 0.13%
F&C Commercial Property Trust Ltd. (FCPT) 128.20p 0.00%

FTSE 250 - Fallers

DFS Furniture (DFS) 235.10p -10.85%
JRP Group (JRP) 117.00p -5.26%
Centamin (DI) (CEY) 156.80p -5.14%
Petra Diamonds Ltd.(DI) (PDL) 141.70p -4.96%
Mitchells & Butlers (MAB) 268.70p -4.78%
Crest Nicholson Holdings (CRST) 414.60p -4.67%
Redrow (RDW) 380.60p -4.54%
Regus (RGU) 235.50p -4.31%
Bovis Homes Group (BVS) 777.00p -4.19%
FirstGroup (FGP) 106.00p -4.16%