London open: Stocks fall as investors turn cautious ahead of US non-farm payrolls

UK stocks pulled back slightly on Friday morning as investors adopted a cautious approach ahead of the all-important non-farm payrolls report from the States.

The FTSE 100 was trading 0.1% lower at 6,869 in early trading.

The Footsie edged higher on Thursday to close at 6,877.97, its highest finish since 14 May when it settled at 6,878.49. Nevertheless, during the session the index reached a high of 6,904.86, its highest intraday level since the record 6,950.60 set in late December 1999.

Driving gains across Europe on Thursday was the surprise announcement by the European Central Bank (ECB) that policymakers had voted to cut interest rates in response to recent weak economic data. The ECB also unveiled plans to buy asset-backed securities and covered bond purchases to help ease credit conditions across the single-currency region.

Dealer Jonathan Sudaria from Capital Spreads said he expected some of Thursday's "froth" on European markets to come off at the open.

"Also keeping markets on edge are the mixed signals coming from the Ukraine. Although Putin and Poroshenko appear to be brokering a peace deal, it doesn’t appear that anyone has told the troops in the field who are still going at each other just as violently," he said.

Meanwhile, Sudaria said that traders would likley "be on the sidelines" before the US employment report due out at 13:30. Consensus forecasts are for a 230,000 increase in payrolls in August, up from 209,000 in July, while the jobless rate is expected to fall to 6.1% from 6.2%.

Mining stocks fall

A reduction in risk appetite ahead of the US data prompted investors to trim their holdings of mining stocks in morning trade with Randgold Resources, Fresnillo, Rio Tinto and Anglo American among the worst performers on the FTSE 100.

Insurer Standard Life was pulling back after strong gains made on Thursday. The shares jumped 8% after the company sold its Canadian operations for £2.2bn to Manulife Financial and promised to return £1.75bn to shareholders.

Oil and gas group Tullow Oil fell slightly on the news that is to sell its interests in two blocks offshore Netherlands for €62.7m (£50m) as it continues to shed off its gas assets in the North Sea.

RBS rose initially after Berenberg hiked its target price for the stock from 210p to 250p. However, gains were quickly erased after the broker repeated its 'sell' rating on the stock, saying that the "shares are expensive considering the legacy risks and the negative impact of the restructuring plan has yet to fully take effect".

Other banks were mixed in early deals with Lloyds and Barclays trading slightly lower and HSBC and Standard Chartered on the rise.

Market Movers
techMARK 2,862.75 -0.17%
FTSE 100 6,868.90 -0.13%
FTSE 250 15,969.98 -0.16%

FTSE 100 - Risers
Burberry Group (BRBY) 1,498.00p +1.15%
GKN (GKN) 360.10p +1.09%
Pearson (PSON) 1,120.00p +0.99%
CRH (CRH) 1,479.00p +0.89%
Persimmon (PSN) 1,358.00p +0.82%
SSE (SSE) 1,515.00p +0.80%
Ashtead Group (AHT) 1,024.00p +0.59%
Experian (EXPN) 1,076.00p +0.56%
Hargreaves Lansdown (HL.) 1,054.00p +0.48%
Weir Group (WEIR) 2,757.00p +0.44%

FTSE 100 - Fallers
Randgold Resources Ltd. (RRS) 4,799.00p -2.85%
London Stock Exchange Group (LSE) 2,035.00p -2.40%
Coca-Cola HBC AG (CDI) (CCH) 1,437.00p -2.18%
Fresnillo (FRES) 891.00p -2.03%
Petrofac Ltd. (PFC) 1,096.00p -1.70%
Standard Life (SL.) 412.50p -1.13%
Meggitt (MGGT) 473.10p -0.98%
Capita (CPI) 1,206.00p -0.90%
Anglo American (AAL) 1,580.00p -0.85%
SABMiller (SAB) 3,431.50p -0.82%

FTSE 250 - Risers
Euromoney Institutional Investor (ERM) 1,142.00p +2.15%
Thomas Cook Group (TCG) 137.20p +1.93%
St. Modwen Properties (SMP) 377.10p +1.92%
Just Retirement Group (JRG) 143.20p +1.92%
AO World (AO.) 222.60p +1.32%
NMC Health (NMC) 481.20p +1.31%
Computacenter (CCC) 630.50p +1.12%
Riverstone Energy Limited (RSE) 915.00p +1.10%
Hochschild Mining (HOC) 166.20p +1.09%
Fidessa Group (FDSA) 2,264.00p +1.07%

FTSE 250 - Fallers
Foxtons Group (FOXT) 234.00p -2.74%
Electrocomponents (ECM) 245.10p -1.96%
Ferrexpo (FXPO) 131.10p -1.65%
Premier Farnell (PFL) 196.90p -1.65%
Polymetal International (POLY) 525.00p -1.41%
Lonmin (LMI) 225.40p -1.36%
Henderson Group (HGG) 226.00p -1.22%
TalkTalk Telecom Group (TALK) 310.00p -1.21%
Just Eat (JE.) 290.70p -1.19%
Supergroup (SGP) 1,177.00p -1.18%