London midday: Stocks recoup small losses as Pearson surges; payrolls eyed

London stocks had flattened out by midday, recovering from earlier small losses as oil steadied and well-received corporate news from the likes of Pearson and IAG lent a hand, with the focus set to shift to the US non-farm payrolls report later in the session.

The FTSE 100 was unchanged at 7,248.92, while the pound was up 0.1% versus the dollar at 1.2939.

The closely-followed payrolls report, which is released at 1330 BST along with the unemployment rate, is expected to come in at 190,000 for April.

IG analyst Joshua Mahony said: "This afternoon’s US jobs report comes off the back of an uncharacteristically poor payrolls number last month. The big question today is whether last month was merely a weather-related blip or something more serious. With markets currently seeing a near 90% chance of an interest rate hike next month, a strong batch of jobs data this afternoon could be one of the final pieces of the jigsaw."

Investors will also turn their attention to speeches from various Fed officials such as Stanley Fischer, John Williams, Charles Evans and Fed chair Janet Yellen.

Meanwhile, oil prices steadied after falling sharply amid worries that Opec and other producing countries would not take further steps to reduce the glut of crude. West Texas Intermediate and Brent crude were up 0.1% to $45.45 a barrel and $48.44, respectively. At 1800 BST, Baker Hughes will release its latest report on the number of active US rigs drilling for oil.

There were a few bright spots on the corporate front. Pearson shares surged after the education publisher posted a 6% increase in first-quarter underlying sales as it reiterated its guidance for the full year and announced further cost-cutting measures and a strategic review of its K12 courseware publishing business.

Marks and Spencer rallied after it appointed Archie Norman as chairman to take over from Robert Swannell at the start of September.

British Airways owner International Consolidated Airlines Group racked up healthy gains as it reported first quarter-profits well ahead of expectations as a drop in costs offset lower passenger revenues. Operating profits in the first three months of the year of €170m before exceptional items were up 10% on the same period last year.

Smith & Nephew advanced after saying its full-year outlook for underlying revenue growth remained unchanged and reporting flat revenue for the first quarter.

Millennium & Copthorne Hotels was unchanged as it posted an 18% rise in first-quarter revenue per available room but highlighted difficult trading conditions in Asia.

EasyJet flew higher after reporting a 12% increase in passenger numbers for April and an improvement in the load factor.

Irish packaging group Smurfit Kappa was in the black after saying it was well positioned for the rest of the year and posting a rise in first-quarter revenue.

BBA Aviation nudged up after saying trading in the first four months of the year was in line, with revenue up 19% compared to the same period last year, while Acacia Mining was lifted by an upgrade to 'add' by Peel Hunt.

On the downside, InterContinental Hotels was on the back foot after it said first-quarter revenue grew but announced that chief executive Richard Solomons was stepping down after six years in the role.

Morgan Advanced Materials retreated as it said trading conditions since the full year were in line with management expectations, while Inmarsat and Barclays were hit by downgrades at Barclays and Goldman Sachs, respectively.

Market Movers

FTSE 100 (UKX) 7,248.92 0.01%
FTSE 250 (MCX) 19,602.92 -0.40%
techMARK (TASX) 3,529.66 0.01%

FTSE 100 - Risers

Pearson (PSON) 746.50p 13.45%
International Consolidated Airlines Group SA (CDI) (IAG) 600.00p 4.90%
Marks & Spencer Group (MKS) 374.80p 4.84%
Fresnillo (FRES) 1,423.00p 4.25%
easyJet (EZJ) 1,247.00p 3.14%
Randgold Resources Ltd. (RRS) 6,790.00p 3.11%
Smith & Nephew (SN.) 1,302.00p 2.52%
Glencore (GLEN) 282.40p 1.88%
Rio Tinto (RIO) 2,953.50p 1.49%
BHP Billiton (BLT) 1,133.00p 1.43%

FTSE 100 - Fallers

Barclays (BARC) 207.60p -2.01%
InterContinental Hotels Group (IHG) 4,098.00p -1.94%
Hargreaves Lansdown (HL.) 1,380.00p -1.64%
Provident Financial (PFG) 3,199.00p -1.63%
WPP (WPP) 1,665.00p -1.54%
Schroders (SDR) 3,193.00p -1.45%
Mediclinic International (MDC) 802.50p -1.41%
Centrica (CNA) 195.40p -1.31%
Merlin Entertainments (MERL) 507.00p -1.17%
Convatec Group (CTEC) 291.80p -1.08%

FTSE 250 - Risers

Acacia Mining (ACA) 413.20p 9.28%
Hochschild Mining (HOC) 244.90p 4.21%
JRP Group (JRP) 126.90p 2.34%
Polymetal International (POLY) 985.50p 2.28%
Centamin (DI) (CEY) 157.70p 2.20%
Vedanta Resources (VED) 605.00p 1.94%
NMC Health (NMC) 2,150.00p 1.90%
Virgin Money Holdings (UK) (VM.) 305.10p 1.77%
Debenhams (DEB) 52.00p 1.46%
ZPG Plc (ZPG) 374.40p 1.46%

FTSE 250 - Fallers

Inmarsat (ISAT) 775.50p -5.94%
Morgan Advanced Materials (MGAM) 316.40p -3.65%
Lancashire Holdings Limited (LRE) 675.50p -3.36%
Domino's Pizza Group (DOM) 321.10p -3.14%
Cairn Energy (CNE) 188.10p -2.89%
UBM (UBM) 698.50p -2.31%
Allied Minds (ALM) 145.30p -2.09%
Supergroup (SGP) 1,547.00p -2.03%
Restaurant Group (RTN) 329.00p -1.94%
Sports Direct International (SPD) 303.20p -1.85%