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London midday: Stocks tick higher as pound slides; payrolls eyed

Fri, 6th Oct 2017 11:26

(ShareCast News) - London stocks had ticked a little higher by midday on Friday, underpinned by a weaker pound, but with moves muted as investors refrained from making big bets either way ahead of the latest non-farm payrolls report.

The FTSE 100 was up 0.2% to 7,521.82, while the pound was down 0.4% against the dollar at 1.3069 and 0.3% weaker versus the euro at 1.1158.

Sterling, which has an inverse effect on London's blue chip benchmark due to its heavy weighting of overseas earnings, was on track for its worst week in a year, weighed down by political uncertainty and a potential leadership challenge following Prime Minister Theresa May's shambolic speech at the Tory party conference.

Ahead of a second speech this week by Bank of England chief economist Andy Haldane at 1300 BST and the US non-farm payrolls report at 1330 BST, investors were digesting the latest housing data from lender Halifax and retail data from BDO.

The figures showed the average house price in the UK hit its highest on record in September, underpinned by a shortage of homes.

House prices rose 4% in the three months to September compared to a year ago, up from a 2.6% increase in August and putting the average house price at 225,109, which is the highest on record. Economists had expected a smaller gain of 3.6%.

Prices in the last three months were up 1.4% on the previous quarter, marking the fastest price growth since February. Meanwhile, prices rose 0.8% between August and September following a 1.5% jump in August and versus expectations for a 0.1% rise.

UK retail sales data from BDO for September was solid but growth remained weak amid rising prices, a consumer crunch and declining high street footfall. Total like-for-like sales increased 2.9% but this was versus a decline of 2.8% in the same month last year.

Spreadex analyst Connor Campbell said there are two items on the afternoon's economic agenda that could ease sterling's suffering, starting with the speech from Haldane.

"In the past Haldane has shown the ability to move the markets, so sterling will be on the lookout for any hawkish hints from the Bank of England chief economist.

"Then comes the US non-farm jobs report, with the hurricane-hit headline figure set to drop from 156k to 82k month-on-month. Arguably more important will be the wage growth reading, which is forecast to rise from 0.1% to 0.3%; if this misses estimates the dollar may dip, thanks to the dovish damage it does to a potential Fed rate hike in the next few months."

In corporate news, CRH was on the back foot after its proposed $3.5bn acquisition of US-based Ash Grove was been derailed after the Kansas company received a potentially larger rival offer.

Budget airline easyJet flew lower despite saying pre-tax profit for the year is expected to be at the upper end of the previously guided range as it reported a record number of passengers over the summer. Analysts said the stock was likely being dragged lower by worries that the airline is still expecting market capacity growth to be a headwind.

On the upside, Ultra Electronics was in the black after it said that shareholders in Sparton have approved the acquisition agreed earlier this year.

NMC Health was boosted by an initiation at 'buy' by Berenberg, while Barratt Developments gained after Credit Suisse lifted it to 'outperform' and Pets at Home rallied on an upbeat note from HSBC.

Market Movers

FTSE 100 (UKX) 7,521.82 0.18%

FTSE 250 (MCX) 20,164.25 0.38%

techMARK (TASX) 3,541.19 0.04%

FTSE 100 - Risers

Mediclinic International (MDC) 680.00p 2.41%

Admiral Group (ADM) 1,848.00p 2.04%

British American Tobacco (BATS) 4,786.50p 1.73%

NMC Health (NMC) 2,768.00p 1.69%

InterContinental Hotels Group (IHG) 4,100.00p 1.38%

Carnival (CCL) 4,980.00p 1.30%

Pearson (PSON) 624.00p 1.30%

Direct Line Insurance Group (DLG) 360.30p 1.29%

G4S (GFS) 282.00p 1.22%

BT Group (BT.A) 282.60p 1.11%

FTSE 100 - Fallers

easyJet (EZJ) 1,249.00p -2.73%

Centrica (CNA) 175.10p -1.35%

CRH (CRH) 2,774.00p -1.28%

Marks & Spencer Group (MKS) 349.80p -1.21%

International Consolidated Airlines Group SA (CDI) (IAG) 610.50p -1.13%

Lloyds Banking Group (LLOY) 66.71p -0.88%

Morrison (Wm) Supermarkets (MRW) 231.20p -0.82%

Standard Chartered (STAN) 773.30p -0.66%

Unilever (ULVR) 4,390.00p -0.53%

SSE (SSE) 1,374.00p -0.43%

FTSE 250 - Risers

Cobham (COB) 147.90p 2.92%

Melrose Industries (MRO) 220.00p 2.80%

Pets at Home Group (PETS) 217.70p 2.79%

Entertainment One Limited (ETO) 278.50p 2.73%

Greencore Group (GNC) 193.60p 2.33%

Saga (SAGA) 192.90p 2.01%

PayPoint (PAY) 960.50p 1.96%

Fisher (James) & Sons (FSJ) 1,559.00p 1.90%

QinetiQ Group (QQ.) 244.40p 1.75%

CLS Holdings (CLI) 209.60p 1.75%

FTSE 250 - Fallers

Renishaw (RSW) 4,466.00p -8.48%

Hikma Pharmaceuticals (HIK) 1,177.00p -3.68%

Wetherspoon (J.D.) (JDW) 1,256.00p -2.10%

Softcat (SCT) 415.90p -1.45%

JD Sports Fashion (JD.) 370.10p -1.36%

IP Group (IPO) 139.60p -1.34%

Stagecoach Group (SGC) 166.30p -1.13%

Grafton Group Units (GFTU) 819.00p -1.09%

TBC Bank Group (TBCG) 1,662.00p -1.07%

Polymetal International (POLY) 866.00p -0.97%

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