London open: Stocks edge up ahead of payrolls; TalkTalk tumbles

London stocks rose in early trade on Friday but gains were fairly modest as investors digested a downbeat reading on the Chinese manufacturing sector and eyed the release of the latest non-farm payrolls report.

At 0830 GMT, the FTSE 100 was up 0.3% at 6,987.29, while the pound was flat against the dollar at 1.3107 and down 0.1% versus the euro at 1.1444.

The Caixin/Markit manufacturing purchasing managers’ index for January fell to 48.3 from 49.7 in December, marking its worst reading since February 2016 and missing expectations for a reading of 49.5.

Meanwhile, US President Donald Trump said on Thursday that he will meet with Chinese President Xi Jinping soon to seal a deal on trade.

Speaking at the White House during a meeting with Chinese vice premier Liu He following two days of trade talks between US and Chinese delegates, Trump said he was optimistic that the two nations could reach "the biggest deal ever made".

Spreadex analyst Connor Campbell said: "Some positive US-Sino trade talk noise overnight failed to provoke any substantial growth on Friday morning, the signs of progress undermined by data from China that underscored the need for a deal.

"Though the details what of happens next are still unclear, with Donald Trump claiming he will meet President Xi Jinping soon and reports of a potential mid-February meeting in Beijing for yet more negotiations, the overall tone from the January-ending trade talks was one of cautious optimism. This includes China agreeing to ‘vigorously expand’ its US imports, alongside further discussions about intellectual property theft and technology transfer."

"The lack of concrete deal, however, meant the markets were reticent to celebrate anything just yet."

The big focus on Friday will be the US non -farm payrolls report, unemployment rate and average earnings, all due at 1330 GMT. The jobs report is expected to show an increase of 165,000 in January compared to the 312,000 jobs that were added in December.

Meanwhile, the unemployment rate is expected to hold steady at 3.9%, while yearly average earnings are forecast to be unchanged at 3.2%.

In the UK, Markit’s manufacturing PMI is at 0930 GMT.

In corporate news, exhibitions, events and business intelligence group Informa edged up as it announced the sale of its Life Sciences Media Brands portfolio to US-based healthcare, education and market research company MJH Associates for just over $100m.

Euromoney Institutional Investor was higher as it said on that trading between 1 October and 31 December 2018 was in line with the board’s expectations and its outlook is unchanged.

UK energy supplier SSE was in the green after saying it was selling 49.9% of its Scottish Stronelairg and Dunmaglass wind farms to Greencoat UK Wind and an unnamed UK pension fund for £635m. Greencoat was a just a touch weaker.

Paddy Power Betfair slipped after saying it had bought an initial 51% controlling stake in Georgian betting outfit Adjarabet for £101m, adding that it expected to snap up the rest of the company within three years.

Glencore was on the back foot as it said it unearthed more copper, cobalt and nickel in the fourth quarter of 2018 compared to the quarter before, while zinc, lead, gold and silver all dipped.

TalkTalk tumbled as it reported further good growth of customer numbers in the third quarter but trimmed its full-year profit guidance due to IFRS 15 timing adjustments and investment growth.

Plastic packaging company RPC Group, which now has both Apollo Global Management and US packaging group Berry Global vying for its attention, ticked a touch lower as it said third-quarter operating profit was broadly flat on the previous year.

In broker note action, Close Brothers was knocked lower by a downgrade to ‘sell’ at Citi, while Rentokil was boosted by an upgrade to ‘buy’ by the same outfit.

Plus500 rallied on the back of an upgrade to ‘add’ at Peel Hunt, while Rio Tinto was lifted to ‘add’ at AlphaValue, but Intertek was downgraded to ‘hold’ at Jefferies.

Market Movers

FTSE 100 (UKX) 6,987.29 0.26%
FTSE 250 (MCX) 18,766.00 0.29%
techMARK (TASX) 3,380.56 0.20%

FTSE 100 - Risers

Burberry Group (BRBY) 1,837.50p 2.00%
Melrose Industries (MRO) 171.75p 1.84%
Rolls-Royce Holdings (RR.) 900.00p 1.76%
Bunzl (BNZL) 2,430.00p 1.25%
Smurfit Kappa Group (SKG) 2,229.14p 1.23%
Rentokil Initial (RTO) 341.00p 1.19%
Rio Tinto (RIO) 4,236.75p 1.18%
Experian (EXPN) 1,934.00p 1.15%
Croda International (CRDA) 4,874.00p 1.10%
Anglo American (AAL) 1,964.00p 1.09%

FTSE 100 - Fallers

Glencore (GLEN) 304.35p -1.65%
Intertek Group (ITRK) 4,830.00p -1.59%
Fresnillo (FRES) 991.76p -1.32%
BT Group (BT.A) 230.10p -0.99%
Wood Group (John) (WG.) 536.60p -0.85%
Vodafone Group (VOD) 137.42p -0.84%
BP (BP.) 516.20p -0.75%
Royal Dutch Shell 'B' (RDSB) 2,356.00p -0.53%
Royal Dutch Shell 'A' (RDSA) 2,352.00p -0.42%
Scottish Mortgage Inv Trust (SMT) 482.07p -0.33%

FTSE 250 - Risers

Ferrexpo (FXPO) 269.90p 4.45%
IP Group (IPO) 109.00p 2.83%
JPMorgan Indian Investment Trust (JII) 667.24p 2.49%
Clarkson (CKN) 2,620.00p 2.34%
Hays (HAS) 153.60p 1.92%
Plus500 Ltd (DI) (PLUS) 1,563.00p 1.82%
Ultra Electronics Holdings (ULE) 1,306.00p 1.71%
Halfords Group (HFD) 235.40p 1.64%
Kaz Minerals (KAZ) 603.00p 1.62%
UDG Healthcare Public Limited Company (UDG) 589.00p 1.55%

FTSE 250 - Fallers

TalkTalk Telecom Group (TALK) 99.88p -10.50%
Close Brothers Group (CBG) 1,436.00p -3.30%
Vivo Energy (VVO) 127.70p -1.69%
Greencoat UK Wind (UKW) 131.60p -1.64%
Contour Global (GLO) 165.60p -1.43%
Premier Oil (PMO) 72.97p -1.33%
Tullow Oil (TLW) 202.60p -1.03%
Just Group (JUST) 100.50p -0.89%
Hilton Food Group (HFG) 920.00p -0.86%
Ibstock (IBST) 240.60p -0.82%