London open: Stocks rise as Brent reaches $50 per barrel

London stocks rose on Friday as oil prices jumped and traders looked ahead to the US non-farm payrolls report.

Oil prices gained even as OPEC failed to agree on output levels at Thursday’s meeting in Vienna, after government data showed a drop in US weekly crude inventories.

The Energy Information Agency on Thursday said US crude inventories fell by 1.4m barrels in the week ended May 27 to 535.7m barrels.

At 0852 BST Brent crude advanced 0.49% to $50.29 per barrel and West Texas Intermediate rose 0.38% to $49.36 per barrel.

The US non-farm payrolls report at 1330 BST is expected to show US employers added 160,000 jobs in May, the same as the previous month, while the unemployment rate is forecast to fall to 4.9% from 5.0%.

Average hourly earnings are forecast to have risen 2.5% year-on-year in May, in line with April’s growth. On the month earnings are projected to increase 0.2% in May, slowing from a 0.3% in April.

The Fed is monitoring the health of the labour market as it determines the timing of its next interest rate hike.

“Current market pricing suggests a 24% chance of a move in June, a drop from yesterday, but with non-farm payrolls looming on Friday we could easily see the declining trend reversed if the figures look robust on most measures,” said Chris Beauchamp, senior market analyst at IG.

A batch of services activity data is also on the agenda with Markit publishing its purchasing managers’ index on the UK at 0930 BST followed by its US PMI at 1445 BST and ISM’s non-manufacturing composite at 1500 BST.

The Eurozone services PMI for May was unexpectedly revised higher to 53.3 from 53.1. A reading above 50 signals an expansion in the sector while a level below that suggests a contraction.

Eurozone retail sales figures at 1000 BST are also due along with US factory orders at 1500 BST.

On the company front, oil producers rallied on the surge in crude prices with BHP Billiton, BP, Royal Dutch Shell and Tullow Oil in the black.

BP has settled a lawsuit arising from the 2010 Deepwater Horizon oil spill by agreeing to pay investors who bought American Depository Shares $175m.

ICAP gained after the markets operator and provider of post-trade risk mitigation and information services announced that China Foreign Exchange Trade System has chosen it to deliver the underlying technology for fixed income and foreign exchange electronic execution services in mainland China.

Wolseley was still under pressure a day after Canaccord Genuity downgraded the stock to ‘hold’ from ‘buy’ and slashed its target price to 4,200p from 4,400p.

Marks & Spencer dropped after UBS on Thursday cut its price target to 440p from 490p and reduced its guidance on pre-tax profit for fiscal year 2017 by 12% to £625m due to the company’s plans to lower prices at its clothing business. The retailer also went ex-dividend on Thursday.

Market Movers

FTSE 100 (UKX) 6,247.00 0.99%
FTSE 250 (MCX) 17,136.28 0.35%
techMARK (TASX) 3,142.56 0.56%

FTSE 100 - Risers

Anglo American (AAL) 603.00p 2.64%
Glencore (GLEN) 131.90p 2.61%
BP (BP.) 361.35p 2.34%
BHP Billiton (BLT) 822.80p 2.14%
Royal Dutch Shell 'B' (RDSB) 1,698.00p 1.95%
Antofagasta (ANTO) 425.40p 1.92%
Fresnillo (FRES) 1,064.00p 1.92%
Royal Dutch Shell 'A' (RDSA) 1,692.50p 1.90%
Rio Tinto (RIO) 1,898.50p 1.77%
InterContinental Hotels Group (IHG) 2,681.00p 1.63%

FTSE 100 - Fallers

Marks & Spencer Group (MKS) 351.20p -1.51%
Barratt Developments (BDEV) 582.50p -0.43%
Sky (SKY) 936.00p -0.32%
RSA Insurance Group (RSA) 483.60p -0.23%
Wolseley (WOS) 3,781.00p -0.13%
ITV (ITV) 212.30p -0.09%
Sainsbury (J) (SBRY) 256.70p -0.08%
WPP (WPP) 1,596.00p -0.06%
Taylor Wimpey (TW.) 192.30p -0.05%
Intertek Group (ITRK) 3,157.00p 0.03%

FTSE 250 - Risers

Tullow Oil (TLW) 237.00p 2.73%
Evraz (EVR) 112.30p 2.18%
Acacia Mining (ACA) 313.00p 1.92%
Serco Group (SRP) 108.90p 1.87%
ICAP (IAP) 422.80p 1.73%
Ophir Energy (OPHR) 72.05p 1.69%
Vedanta Resources (VED) 379.10p 1.69%
Wood Group (John) (WG.) 625.50p 1.54%
Centamin (DI) (CEY) 101.00p 1.41%
Bankers Inv Trust (BNKR) 588.50p 1.38%

FTSE 250 - Fallers

Dechra Pharmaceuticals (DPH) 1,140.00p -3.23%
John Laing Group (JLG) 216.94p -2.72%
PZ Cussons (PZC) 331.40p -2.67%
Genesis Emerging Markets Fund Ltd Ptg NPV (GSS) 483.30p -1.37%
Circassia Pharmaceuticals (CIR) 266.10p -1.08%
Genus (GNS) 1,522.00p -0.85%
Auto Trader Group (AUTO) 396.10p -0.83%
Zoopla Property Group (WI) (ZPLA) 313.50p -0.73%
Melrose Industries (MRO) 389.30p -0.64%
Supergroup (SGP) 1,421.00p -0.63%