LONDON MARKET MIDDAY: FTSE 100 Trails European Peers Amid Relief Rally

LONDON (Alliance News) - Stocks in London were higher at midday Friday, joining a global relief rally as trade tensions between the US and China eased, although the FTSE 100's progress lagged behind its European counterparts due to a firm pound and declines in defensive stocks. The FTSE 100 index was up 0.8%, or 59.46 points, at 7,174.12. The FTSE 250 was up 1.2%, or 232.77 points, at 19,404.70, and the AIM All-Share was up 1.2%, or 12.25 points, at 1,000.43.The Cboe UK 100 was up 1.0% at 12,158.01, while the Cboe UK 250 was 1.4% higher at 17,388.17. The Cboe UK Small Companies was up 0.2% at 11,624.55.In Paris the CAC 40 was up 1.3%, Italy's FTSE MiB was up 1.6% and the DAX 30 in Frankfurt was up 1.5%. "I think investors will be feeling much more at ease now, although it's still too early to call the end of the sell-off. Naturally though, all this talk of a trade deal between the world's two largest economies that are currently engaging in a tariff tit-for-tat, is a supportive factor that could prevent another slump," said Oanda senior market analyst Craig Erlam.US President Donald Trump on Thursday said he had a "long and very good" conversation with Chinese President Xi Jinping on trade and North Korea, and that the two planned to meet at the upcoming G-20 summit.In response, Xi said on CCTV state television that he hoped China and the US would be able to promote a steady and healthy relationship, and that he was willing to meet with Trump in Argentina on the trade issue."Today's market moves will prove a double-edged sword for the Chinese leadership. While some relief from the 'Sell China' market mentality will be welcome, the moves are a demonstration of the power of Washington policy on the world's financial markets," noted analysts at ING. Notably, Trump's softening rhetoric in regards to China comes ahead of US midterm elections which are due to start on Tuesday. "The timing of this is also more than a little conspicuous. Trump has often lauded stock markets gains as a reflection of his economic policy and the recent declines pose an unwanted challenge to that narrative at a particularly sensitive time," said XTB chief market analyst David Cheetham."Polls suggest the Democrats are the favourites to regain the house, and should they take control of the lower chamber then the bipartisan nature of politics will likely see attempts for further fiscal stimulus from the Trump administration frustrated while also raising the prospect of a Trump impeachment significantly," Cheetham added. On the London Stock Exchange, miners were among the blue chip risers amid hopes of a resolution between the US and China.Antofagasta was up 3.6%, Anglo American, up 3.3%, Glencore, up 2.6%, BHP Billiton, up 3.0%."Optimism over a potential deal with China has unsurprisingly provided a huge boost to sentiment amid markets that are reliant upon global trade and development, with a sharp rise in commodity prices helping boost mining firms," said IG market analyst Joshua Mahony.Brent oil was higher quoted at USD73.06 a barrel at midday from USD72.77 late Thursday.Sage Group was up 3.0% after the accounting software provider promoted Chief Financial Officer Steve Hare to chief executive post. Hare - CFO since 2014 - will replace former CEO Stephen Kelly who stood down at the end of August. On the resignation of Kelly, Hare was also handed the additional role of interim chief operating officer. At the other end of the large cap index, utility stocks were lower as risk appetite among investors returned as global trade tensions eased. Severn Trent was down 2.0%, United Utilities down 1.7%, National Grid down 1.3% and SSE down 1.2%."It is perhaps telling of the market mood that utilities, which are typically a safe haven purchase, are uniformly in decline," said City Index analyst Fiona Cincotta.In addition, tobacco producers - which often rise during times of market turmoil - were the worst blue chip performers as demand for defensive stocks waned. Imperial Brands was down 2.6% and British American Tobacco was down 1.8%. BT Group was down 1.3% after UK communications regulator Ofcom announced plans to provide rival companies with unrestricted access to cable ducts and poles for internet and telephone lines held by the telecommunications giant's subsidiary Openreach. Ofcom's proposals are welcomed by BT as long as it continues to "encourage investment", the company said. The pound was higher against the dollar quoted at USD1.3027 at midday, compared to USD1.2969 at the London equities close Thursday, following positive UK construction PMI data.Growth in the UK construction sector unexpectedly improved in October on a strong rebound in civil engineering, survey data from IHS Markit showed. The IHS Markit/CIPS UK construction purchasing managers' index, or PMI, rose to 53.2 from 52.1 in September. Economists had expected a score of 52. A PMI reading above 50 suggests growth in activity. The construction sector has grown every month since April, yet the PMI reading remains below its long-term average of 54.3. The euro was up versus the greenback at USD1.1450 at midday, against USD1.1393 late Thursday, despite data showing that the manufacturing sector in the euro area expanded at its slowest pace in more than two years in October.The manufacturing Purchasing Managers' Index for eurozone fell to a 26-month low of 52.0 from 53.2 in September, final data from IHS Markit showed. The flash reading released on October 24 was 52.1. Any reading above 50 indicates expansion in the manufacturing sector.Slower manufacturing growth was recorded across much of the single currency area in October. In Germany, the final PMI reading was 52.2, down from the flash reading 52.3 and from 53.7 in September. In France, the final reading was steady from the flash reading of 51.2 but down from 52.5 in September.Stocks in New York were set for a higher open ahead of the closely watched US jobs report for October at 1230 GMT, which includes average hourly earnings, the unemployment rate and nonfarm payroll numbers.The DJIA was called up 1.1%, the S&P 500 index up 1.1% and the Nasdaq Composite up 1.8%.Economists are expecting employment to climb by 190,000 jobs in October after an increase of 134,000 jobs in September.The jobless rate is expected to hold at 3.7%. It will be the final jobs report before the congressional elections.In the US earnings calendar, oil majors Chevron and Exxon Mobil will report third quarter results before the market open in New York.