London open: FTSE little changed as investors eye payrolls

London stocks were little changed in early trade on Friday following heavy losses in the previous session, as investors paused for breath ahead of the latest US non-farm payrolls report.

At 0850 GMT, the FTSE 100 was down just 0.1% at 7,445.40.

CMC Markets analyst Michael Hewson said: "Expectations are for December payrolls to improve to 420k, and the unemployment rate to fall further to 4.1%, although some estimates for payrolls have come in as high as 900m. It will certainly need to see a decent number to help push the US dollar up from current levels, and don’t forget to keep an eye out for an upward November revision.

"Ultimately, today’s number is unlikely to make that much difference to how investors view the potential timing of the first US rate rise, with the most attention likely to be on the average hourly earnings numbers which are expected to fall back from 4.8% to 4.2%. This big drop is likely to be as a result of large-scale temporary hiring in the leadup to Thanksgiving and the Christmas period."

The payrolls report is due at 1330 GMT, along with the unemployment rate and average earnings.

On home shores, the latest survey from Halifax showed that house prices rose in December at the fastest annual pace since July 2007 amid strong demand and low supply, but are expected to cool in 2022.

Prices rose 9.8% on the year following an 8.2% increase in November. On the month, prices were up 1.1% in December, in line with the previous month, with the average property price now standing at a new record high of £276,091.

In cash terms, house prices were up by more than £24,500 in 2021, which marks the largest annual cash rise since March 2003.

Halifax managing director Russell Galley, said: "The lack of spending opportunities afforded to people while restrictions were in place helped boost household cash reserves. This factor, alongside the Stamp Duty holiday and the race for space as a result of homeworking, will have encouraged buyers to bring forward home purchases that may have been planned for this year. The extension of the Government’s job and income support schemes also supported the labour market and may have given some households the confidence to proceed with purchases."

Galley also cited a lack of available homes for sale as a factor behind the price increase.

"Looking ahead, the prospect that interest rates may rise further this year to tackle rising inflation, and increasing pressures on household budgets, suggests house price growth will slow considerably. Our expectation is that house prices will maintain their current strong levels but that growth relative to the last two years will be at a slower pace. However, there are many variables which could push house prices either way, depending on how the pandemic continues to impact the economic environment."

In equity markets, Shell nudged down as it said its $7bn share buyback programme would continue "at pace" despite weaker oil product sales due to the Omicron Covid variant and forex headwinds in Turkey.

Bulmers and Magners owner C&C fizzed lower after it said trading conditions in December for its on-trade business were "significantly impacted" by renewed government restrictions across the UK and Ireland.

On the upside, miners gained as metals prices rose, with Rio, BHP and Anglo all higher.

Market Movers

FTSE 100 (UKX) 7,445.40 -0.07%
FTSE 250 (MCX) 23,334.24 -0.35%
techMARK (TASX) 4,467.75 -0.61%

FTSE 100 - Risers

Rio Tinto (RIO) 5,178.00p 1.97%
BHP Group (BHP) 2,286.50p 1.85%
Evraz (EVR) 614.80p 1.49%
JD Sports Fashion (JD.) 215.40p 1.22%
Prudential (PRU) 1,297.50p 0.93%
Smith (DS) (SMDS) 401.50p 0.93%
Anglo American (AAL) 3,190.50p 0.84%
Aviva (AV.) 429.40p 0.82%
Standard Chartered (STAN) 481.20p 0.82%
BP (BP.) 358.05p 0.82%

FTSE 100 - Fallers

Dechra Pharmaceuticals (DPH) 4,458.00p -2.32%
ITV (ITV) 112.60p -2.09%
Aveva Group (AVV) 3,080.00p -1.72%
Diageo (DGE) 3,919.50p -1.48%
BT Group (BT.A) 173.05p -1.42%
Burberry Group (BRBY) 1,794.50p -1.40%
Hargreaves Lansdown (HL.) 1,339.50p -1.36%
Fresnillo (FRES) 809.80p -1.32%
SEGRO (SGRO) 1,338.50p -1.18%
British Land Company (BLND) 537.60p -1.10%

FTSE 250 - Risers

Clarkson (CKN) 3,960.00p 3.66%
Cineworld Group (CINE) 39.08p 3.03%
Centamin (DI) (CEY) 88.76p 2.23%
Aston Martin Lagonda Global Holdings (AML) 1,394.50p 1.75%
Hays (HAS) 150.40p 1.42%
Polar Capital Technology Trust (PCT) 2,670.00p 1.37%
Marks & Spencer Group (MKS) 254.30p 1.36%
Syncona Limited NPV (SYNC) 214.50p 1.18%
4Imprint Group (FOUR) 2,800.00p 1.08%
BlackRock Smaller Companies Trust (BRSC) 2,150.00p 0.94%

FTSE 250 - Fallers

Provident Financial (PFG) 351.60p -2.71%
Chrysalis Investments Limited NPV (CHRY) 228.00p -2.56%
Fidelity China Special Situations (FCSS) 297.00p -2.46%
C&C Group (CDI) (CCR) 231.00p -2.37%
Trustpilot Group (TRST) 290.80p -2.22%
Greggs (GRG) 3,035.00p -2.13%
Carnival (CCL) 1,424.20p -2.06%
Oxford Biomedica (OXB) 1,130.00p -1.91%
Baltic Classifieds Group (BCG) 244.00p -1.61%
XP Power Ltd. (DI) (XPP) 4,900.00p -1.61%