London midday: Stocks turn higher as investors eye payrolls report
London stocks had shaken off early losses to trade higher by midday on Friday despite a tech-led sell ff on Wall Street and weakness in the UK housebuilding sector, as investors eyed the latest US non-farm payrolls report.
The FTSE 100 was up 0.7% at 5,889.39.
CMC Markets analyst David Madden said: "Equity markets have clawed back some of the ground that was lost yesterday. The mood is relatively upbeat when you take into consideration the horrendous sell off suffered in the US last night. In recent weeks, the US titans of tech racked up big gains as traders sought out companies that could perform well amid the pandemic.
"The lofty valuations were talked about at length, and yesterday there was a monster fall in the tech sector, which rippled out across the markets as a whole.
"There is some optimism circulating this morning, but volatility is likely to be low as the US nonfarm payrolls report will be announced at 1.30pm."
On home shores, a survey released earlier showed UK construction growth suffered a surprise slowdown in August as the sector continued to cut jobs.
The IHS Markit/CIPS purchasing managers' index fell to 54.6 from 58.1 in July because of a lack of new orders. On average analysts had expected the reading to improve to 58.5 with 50 marking the difference between contraction and growth.
All three categories of construction weakened in August, which was the worst month for three months. Housebuilding was the strongest category on 60.7 with commercial building on 52.5 and civil engineering registering a decline on 46.6.
The rate of job cuts eased only slightly from July and was close to the fastest pace over the past decade. Business expectations improved on hopes of public sector construction spending and infrastructure projects.
Tim Moore, economics director at IHS Markit, said: "The latest PMI data signalled a setback for the UK construction sector as the speed of recovery lost momentum for the first time since the reopening phase began in May. The main reason for the slowdown in total construction output growth was a reduced degree of catch-up on delayed projects and subsequent shortages of new work to replace completed contracts in August."
Market participants were also mulling the latest comments from Bank of England interest rate setter Michael Saunders, who said the Bank is likely to use further stimulus measures to support the economy through the effects of the Covid-19 crisis.
In equity markets, housebuilders were under the cosh, knocked lower by a double-whammy of bad news in the form of the construction PMI and a decision by the UK's competition regulator to take enforcement action against four of the biggest names in the sector over their treatment of leasehold homeowners.
The CMA has opened cases on Barratt, Countryside, Persimmon and Taylor Wimpey. It said the companies may have imposed unfair terms on leaseholders and misled buyers.
Berkeley Group bucked the trend, however, as it maintained full-year guidance and reported better-than-expected production levels due to pent-up demand after the easing of lockdown measures.
Market Movers
FTSE 100 (UKX) 5,889.39 0.66%
FTSE 250 (MCX) 17,618.23 0.91%
techMARK (TASX) 3,782.18 0.55%
FTSE 100 - Risers
NATWEST GROUP PLC ORD 100P (NWG) 109.75p 4.52%
Kingfisher (KGF) 276.10p 4.03%
International Consolidated Airlines Group SA (CDI) (IAG) 223.80p 3.71%
Antofagasta (ANTO) 1,092.50p 3.60%
Evraz (EVR) 329.80p 3.39%
Whitbread (WTB) 2,583.00p 3.32%
Anglo American (AAL) 1,823.60p 3.10%
Melrose Industries (MRO) 116.55p 3.00%
Imperial Brands (IMB) 1,305.50p 2.80%
GVC Holdings (GVC) 827.60p 2.76%
FTSE 100 - Fallers
Barratt Developments (BDEV) 522.20p -3.19%
Scottish Mortgage Inv Trust (SMT) 883.00p -2.70%
Persimmon (PSN) 2,591.00p -1.89%
Prudential (PRU) 1,143.50p -1.63%
Land Securities Group (LAND) 551.20p -1.41%
British Land Company (BLND) 354.10p -1.31%
SEGRO (SGRO) 933.20p -1.19%
AstraZeneca (AZN) 8,042.00p -0.97%
BT Group (BT.A) 102.45p -0.92%
Pennon Group (PNN) 1,026.50p -0.87%
FTSE 250 - Risers
Carnival (CCL) 1,153.50p 5.49%
Hochschild Mining (HOC) 236.40p 4.69%
Rotork (ROR) 307.20p 4.42%
Virgin Money UK (VMUK) 91.60p 4.30%
Frasers Group (FRAS) 371.20p 4.27%
Network International Holdings (NETW) 401.60p 4.20%
Bank of Georgia Group (BGEO) 945.00p 4.07%
Weir Group (WEIR) 1,284.00p 4.01%
TUI AG Reg Shs (DI) (TUI) 353.30p 3.91%
G4S (GFS) 142.30p 3.91%
FTSE 250 - Fallers
Hammerson (HMSO) 268.25p -6.63%
Hiscox Limited (DI) (HSX) 715.60p -3.82%
Dixons Carphone (DC.) 84.65p -3.42%
National Express Group (NEX) 116.80p -2.67%
FirstGroup (FGP) 40.10p -2.20%
St. Modwen Properties (SMP) 317.00p -2.16%
Helios Towers (HTWS) 155.20p -2.14%
Ascential (ASCL) 281.80p -2.02%
PureTech Health (PRTC) 270.00p -1.46%
PPHE Hotel Group Ltd (PPH) 1,035.00p -1.43%