London open: FTSE flat amid Middle East woes, ahead of payrolls

London stocks were flat in early trade on Friday as Israel’s strikes against Lebanon intensified and as investors eyed the latest US non-farm payrolls report.

At 0900 BST, the FTSE 100 was unchanged at 8,286.14.

Patrick Munnelly at Tickmill Group said: "Escalating tensions in the Middle East have cast a shadow over global markets ahead of the weekend, and oil prices are on the brink of their largest weekly gain in over a year on Friday. Despite the fact that the majority of equity indexes and stock futures are in positive territory, investors are speculating about the possibility of imminent retaliatory strikes by Israel against Iran, which is limiting their gains.

"Brent crude futures are anticipated to experience a weekly increase of approximately 8%, which would be the most significant since February 2023. Conversely, US crude futures are expected to experience a weekly increase of 8.2%, which would be the largest since March of last year. Despite the fact that US President Joe Biden has stated that he does not anticipate a ‘all-out war’ in the Middle East, he has previously suggested that the US was considering strikes on Iran's oil facilities as a response to Tehran's missile attack on Israel.

"In spite of the fact that oil prices have returned to the levels they were at just one month ago and oil has recovered from a low base, the pressure on world stocks and investors' risk appetite is beginning to mount. Should oil prices continue to increase and geopolitical tensions persist, investors may need to reevaluate their inflation forecasts."

Looking ahead to the rest of the day, attention will turn to the US non-farm payrolls report for September, which is due at 1330 BST, along with the unemployment rate and average earnings.

The market is expecting payrolls to grow by 146,000 for September, up a touch from the 140,000 jump seen in August. The unemployment rate is expected to be steady at 4.2% and average hourly earnings are also expected to be steady, at 3.8% year-on-year.

On the UK macro front, the S&P Global/CIPS construction PMI for September is scheduled for release at 0930 BST.

In equity markets, JD Wetherspoon edged higher as it posted a 33% drop in full-year pre-tax profit after separately disclosed items, but a 73.5% increase in pre-tax profit before separately disclosed items to £73.9m. The pub chain also said that full-year revenue rose 5.7% to £2.04bn as like-for-like sales grew 7.6%.

Watches of Switzerland gained after saying it had bought Hodinkee, a specialist website for luxury watch enthusiasts, for an undisclosed sum.

SSE was in the red as it emerged that completion of its Dogger Bank A offshore wind project has been pushed back to the second half of 2025.

Market Movers

FTSE 100 (UKX) 0.04%
FTSE 250 (MCX) 20,823.43 0.40%
techMARK (TASX) 4,820.83 0.11%

FTSE 100 - Risers

Croda International (CRDA) 4,251.00p 2.53%
NATWEST GROUP (NWG) 335.20p 1.67%
Pershing Square Holdings Ltd NPV (PSH) 3,576.00p 1.48%
Lloyds Banking Group (LLOY) 58.26p 1.43%
Fresnillo (FRES) 637.50p 1.35%
Schroders (SDR) 351.60p 1.27%
LondonMetric Property (LMP) 205.80p 1.18%
Antofagasta (ANTO) 1,968.50p 1.16%
Standard Chartered (STAN) 806.00p 1.08%
BP (BP.) 413.40p 1.08%

FTSE 100 - Fallers

SSE (SSE) 1,860.50p -1.59%
JD Sports Fashion (JD.) 140.30p -1.51%
Smurfit Westrock (DI) (SWR) 3,550.00p -1.25%
Relx plc (REL) 3,512.00p -1.10%
United Utilities Group (UU.) 1,023.50p -1.02%
Severn Trent (SVT) 2,572.00p -1.00%
Rolls-Royce Holdings (RR.) 528.20p -0.97%
Phoenix Group Holdings (PHNX) 519.00p -0.86%
London Stock Exchange Group (LSEG) 10,295.00p -0.77%
AstraZeneca (AZN) 11,898.00p -0.55%

FTSE 250 - Risers

SDCL Energy Efficiency Income Trust (SEIT) 64.90p 3.51%
Hochschild Mining (HOC) 190.80p 3.36%
Aston Martin Lagonda Global Holdings (AML) 108.40p 3.34%
Burberry Group (BRBY) 654.80p 3.02%
Ninety One (N91) 184.70p 3.01%
Savills (SVS) 1,174.00p 2.62%
PureTech Health (PRTC) 148.40p 1.92%
Fidelity China Special Situations (FCSS) 239.50p 1.91%
Watches of Switzerland Group (WOSG) 465.00p 1.88%
Ithaca Energy (ITH) 116.90p 1.83%

FTSE 250 - Fallers

Baillie Gifford US Growth Trust (USA) 198.00p -1.49%
Allianz Technology Trust (ATT) 349.00p -1.41%
W.A.G Payment Solutions (WPS) 81.00p -1.22%
XPS Pensions Group (XPS) 285.00p -1.04%
Foresight Group Holdings Limited NPV (FSG) 490.00p -1.01%
Alliance Trust (ATST) 1,198.00p -0.99%
Worldwide Healthcare Trust (WWH) 345.00p -0.86%
Murray International Trust (MYI) 252.50p -0.79%
Auction Technology Group (ATG) 412.00p -0.72%
JPMorgan Global Growth & Income (JGGI) 556.00p -0.71%