LONDON (Alliance News) - UK stock indices are trading mixed to lower mid-morning Thursday as investors reposition ahead of US nonfarm payrolls data later in the afternoon, while the pound rose sharply against its major trading partners after the UK construction sector was reported to have grown at its fastest pace in four months.
The Marktic/CPIS construction purchasing managers' index for June rose to 58.1 from 55.9 in May and surpassing economist expectations of a rise to 56.5. Markit says that the latest reading was well above the long-run survey average of 54.6 and pointed to the fastest increase in overall construction activity since February.
"The extent of the recent rise in construction optimism is partly down to relief that pre-election uncertainty has now passed, but it also suggests that firms are infused with confidence that underlying demand will continue to recover," says Tim Moore, senior economist at Markit.
At mid-morning the pound trades the dollar at USD1.5613 and the euro at EUR1.4095.
The FTSE 100 index trades flat at 6,609.01, the FTSE 250 is down 0.3% at 17,673.38 and the AIM All-Share is down 0.1% at 761.42.
European stock markets are falling back from Wednesday's gains, with the CAC 40 in Paris down 0.2% and the DAX 30 in Frankfurt also down 0.2%.
The Greek situation continues to remain a concern for investors as Eurogroup President Jeroen Dijsselboem said there will be no negotiations between Greece and its creditors until after the referendum on bailout conditions on Sunday.
"There will be no talks in the coming days, either at Eurogroup level or between the Greek authorities and the institutions on proposals or financial arrangements. We will simply await now the outcome of the referendum on Sunday and take into account the outcome of that referendum," Dijsselboem said.
Speaking to Bloomberg TV on Thursday, Greek Finance Minister Yanis Varoufakis once again reiterated his support for the 'No' campaign and said he will resign if the country votes 'Yes' in the upcoming referendum. Varoufakis also reiterated his view that debt restructuring was key to a deal for Greece, adding that he would rather cut off his right arm than sign a deal without debt renegotiation. However, he did add that on other aspects, Greece and its creditors are very close in their opinion.
On the London Stock Exchange, Dixons Carphone is the best performer in the FTSE 100, up 3.5% after it said its Connected World Services arm has signed a deal with US mobile carrier Sprint Corp to open and manage a number of Sprint-branded stores in the US.
Initially, the electricals retailer will supply mobile phone retail expertise to Sprint for 20 new stores. If successful, the scheme will then be rolled out further, with plans to open up to 500 stores. Investec says assuming a full roll-out, the deal will positively impact profit in three to four years, but will be neutral in years one and two.
A number of broker changes also are driving stock movements, with AstraZeneca up 0.9% after Berenberg raised it to Buy from Hold. Intertek Group leads the FTSE 100 fallers, down 2.9% after Jefferies cut it to Underperform from Hold, and Jimmy Choo is up 1.8% after Barclays initiated coverage of the company with an Overweight rating.
ITV trades down 1.1% after UK media and communications regulator Ofcom published its review of public service broadcasting in Britain on Wednesday, with a warning that the debate surrounding retransmission fees may bring extra funding but also may result in more regulation due to the complexity of implementing a new scheme to govern this.
Hunting is the worst performer in the FTSE 250, down 4.5% after it said its operating profit has plunged lower in the first half amid a declining rig count in the face of a falling oil price, though it said it is seeing tentative signs of a recovery, even as its full-year results look set also to show a huge drop in profit.
The energy services company said the second quarter, as anticipated, saw continued declines in the oil and gas market, with an additional 34% decline in wells completed in the US, and 33% worldwide, compared to the first quarter. This "severe" decline has meant operating profit for the company in the first five months is down by 76% year-on-year.
Still ahead in the economic calendar is the release of the European Central Bank's policy meeting accounts at 1230 BST. The focus will be on the US for the rest of the afternoon, with the release of nonfarm payrolls, unemployment and earnings data all at 1330 BST and factory orders at 1500 BST.
By Neil Thakrar; neilthakrar@alliancenews.com; @NeilThakrar1
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