London midday: Stocks rally after BoE rate cut, US non-farms eyed

London stocks continued to rise on Friday following the Bank of England’s fresh stimulus measures, as investors awaited the US non-farm payroll report.

The BoE on Thursday said it was cutting interest rates by 25 basis points to 0.25% and boosting its asset purchases by £60bn, sending UK equities higher and the pound lower.

The rally in stocks has held up on Friday while the pound has rebounded slightly against the dollar. Sterling rose 0.34% to $1.3152 at 1134 BST.

Attention now turns to the US non-farm payrolls report at 1330 BST, which is expected to show employers added 180,000 jobs in July. The unemployment rate is forecast to fall to 4.8% from 4.9%.

“Despite the BoE presenting the biggest package of easing since 2009, there is precious little time for bulls to rest on their laurels, with the uncertainty surrounding today’s US jobs report likely to stifle the longevity of this rally,” said IG market analyst Joshua Mahony.

UBS said the market has been surprised by payrolls volatility following a much better-than-expected June report and much weaker-than-estimated May figures. Overall, the jobs market has slowed, the bank said.

“The shortfall in hiring in May looks anomalous, and both it and the June pace were exaggerated. But smoothing through that volatility yields a gradually slowing trend in hiring consistent with our model,” said UBS economist Samuel Coffin.

On the company front, Royal Bank of Scotland was a top faller on the FTSE 100 after reporting a wider first half loss.

Fellow banks Standard Chartered and Lloyds Banking Group were also sitting lower following the BoE's decision to cut interest rates.

Wolseley was under the cosh after Jefferies downgraded the builders’ merchant to ‘hold’ from ‘buy’ as it took a look at the impact of Brexit on the wider sector.

Going the other way, Rio Tinto shares jumped as it completed the sale of its Mount Pleasant thermal coal assets to MACH Energy Australia Pty, taking its tally for divestments since January 2013 to $4.7bn.

Other miners BHP Billiton, Anglo American and Antofagasta also gained as investors sought safe havens in gold and silver amid a risk environment.

Housebuilders, including Persimmon, Barratt Developments and Berkeley Group, were benefiting from the news of lower interest rates in the UK.

Market Movers

FTSE 100 (UKX) 6,759.88 0.29%
FTSE 250 (MCX) 17,401.93 0.91%
techMARK (TASX) 3,488.67 0.12%

FTSE 100 - Risers

Hikma Pharmaceuticals (HIK) 2,378.00p 7.12%
Rio Tinto (RIO) 2,508.00p 3.61%
BHP Billiton (BLT) 1,018.00p 3.57%
Persimmon (PSN) 1,721.00p 2.93%
Berkeley Group Holdings (The) (BKG) 2,655.00p 2.83%
Anglo American (AAL) 868.30p 2.76%
Antofagasta (ANTO) 512.50p 2.30%
Barratt Developments (BDEV) 435.10p 2.28%
Paddy Power Betfair (PPB) 9,000.00p 1.93%
Taylor Wimpey (TW.) 154.20p 1.92%

FTSE 100 - Fallers

Royal Bank of Scotland Group (RBS) 180.80p -5.83%
Standard Chartered (STAN) 629.80p -2.51%
Wolseley (WOS) 4,100.00p -1.80%
Rolls-Royce Holdings (RR.) 746.00p -1.52%
Pearson (PSON) 883.50p -1.12%
Lloyds Banking Group (LLOY) 51.39p -1.08%
Dixons Carphone (DC.) 339.40p -0.99%
AstraZeneca (AZN) 5,103.00p -0.97%
Tesco (TSCO) 154.10p -0.93%
GlaxoSmithKline (GSK) 1,687.50p -0.68%

FTSE 250 - Risers

Ibstock (IBST) 153.50p 8.02%
Cairn Energy (CNE) 195.00p 7.32%
Tullow Oil (TLW) 207.30p 5.44%
Brewin Dolphin Holdings (BRW) 259.50p 5.10%
Daejan Holdings (DJAN) 5,640.00p 5.03%
Countrywide (CWD) 249.30p 4.75%
Bellway (BWY) 2,117.00p 4.34%
AA (AA.) 270.00p 4.17%
PayPoint (PAY) 1,022.00p 3.86%
McCarthy & Stone (MCS) 176.50p 3.82%

FTSE 250 - Fallers

esure Group (ESUR) 262.00p -6.46%
AO World (AO.) 139.80p -3.52%
Cobham (COB) 161.00p -2.90%
Serco Group (SRP) 128.70p -1.91%
Hays (HAS) 118.00p -1.83%
SSP Group (SSPG) 324.10p -1.37%
Pagegroup (PAGE) 341.70p -1.24%
Greggs (GRG) 1,029.00p -0.87%
William Hill (WMH) 310.60p -0.86%
International Public Partnerships Ltd. (INPP) 161.50p -0.68%