London midday: Stocks push higher after construction data; payrolls eyed

(Sharecast News) - London stocks had extended gains by midday on Friday as investors mulled a solid reading on the UK construction sector and a report suggesting a negotiated trade deal between the EU and the UK was "imminent".
The FTSE 100 was up 0.8% at 6,542.57, while sterling was flat against the dollar at 1.3453, having popped higher earlier after Reuters cited a eurozone official as saying that a Brexit deal is expected before the end of the weekend, barring last-minute breakdown in talks.

The official said the EU stood firm on its state aid demands. However, the source dismissed as spin to force concessions comments by a UK government source who late on Thursday accused the 27-nation bloc of introducing last-minute demands in the negotiations.

According to Reuters, the official also said EU leaders might have a separate gathering on Brexit this month, most likely after a videoconference meeting scheduled for 10-11 December.

Sentiment was also boosted by a survey showing UK construction order books rose at the fastest pace for more than six years in November as more houses were built.

The IHS Markit/CIPS purchasing managers' index rose to 54.7 from 53.1 in October with a score of 50 indicating no change. November's reading beat the average analysts' estimate of 52.

Housebuilding was the strongest part of the industry in November with a reading of 59.2. Civil engineering returned to growth with a score of 52.3 and commercial work had its lowest score for six months at 51.9.

Looking ahead, investors were eyeing the release of the US non-farm payrolls report, unemployment rate and average earnings at 1330 GMT.

In equity markets, a strong showing from BP and Shell helped to lift the top-flight index, after OPEC and Russia agreed to increase oil supply by 500,000 barrels a day from January.

IG analyst Joshua Mahony said: "With BP and Shell both cutting dividends earlier in the year, they lost favour amongst much of the trading community. However, with crude on the rise, and the reinstatement of dividends coming into play, the catch-up trade is on for the oil majors.

"While OPEC may have not managed to pass an entire six month extension to the current production quotas, the tapered approach that will only ever seen 500k change per month does highlight that production will only rise as demand improves. With a trio of vaccines coming into play over the coming months, crude prices are already pushing higher in anticipation of renewed demand."

Elsewhere, British Airways owner IAG flew higher after Deutsche Bank upped its price target on the stock and said it was among its most preferred in the sector.

SSE gained after saying it had sold a 10% stake in the first two phases of Dogger Bank Wind Farm to Eni for £202.5m as it lifted guidance for the 2020/21 fiscal year.

Micro Focus surged after Amazon said it's one of four partners pre-qualified for the AWS Mainframe Migration Technology category.

Croda pushed up after a double-upgrade to 'outperform' at Credit Suisse.

On the downside, Berkeley Group was off earlier lows but still in the red after the housebuilder stuck to its targets for shareholder returns but reported a 16.6% fall in first-half profit caused by the Covid-19 crisis.

Cineworld shares tumbled after Warner Brothers said it would be releasing next year's film slate straight to streaming, at the same time as releasing them to cinemas.

CMC Markets analyst Michael Hewson said: "While this only affects its content in the US, with the films being released to HBO Max, the direction of travel is clear, and could spell the end of some of its cinema real estate, as being unviable, particularly since it has over £6bn in debt already.

"The news that AMC Entertainment, who own the Odeon cinema group has said it will need to raise extra cash in order to get through the winter hasn't helped either."

Market Movers

FTSE 100 (UKX) 6,542.57 0.81%
FTSE 250 (MCX) 20,254.95 0.61%
techMARK (TASX) 4,086.92 0.89%

FTSE 100 - Risers

International Consolidated Airlines Group SA (CDI) (IAG) 177.05p 4.15%
BP (BP.) 276.30p 3.68%
Associated British Foods (ABF) 2,378.00p 3.26%
Royal Dutch Shell 'A' (RDSA) 1,393.20p 2.71%
SSE (SSE) 1,397.00p 2.65%
Royal Dutch Shell 'B' (RDSB) 1,343.80p 2.63%
Persimmon (PSN) 2,923.00p 2.42%
Croda International (CRDA) 6,072.00p 2.22%
CRH (CRH) 3,129.00p 2.22%
British Land Company (BLND) 506.00p 2.02%

FTSE 100 - Fallers

Kingfisher (KGF) 272.20p -3.65%
Rolls-Royce Holdings (RR.) 130.70p -3.11%
Severn Trent (SVT) 2,310.00p -1.99%
Pennon Group (PNN) 977.40p -1.77%
Melrose Industries (MRO) 165.30p -1.37%
Hargreaves Lansdown (HL.) 1,470.50p -1.31%
Polymetal International (POLY) 1,629.50p -1.24%
Fresnillo (FRES) 1,123.50p -1.19%
Spirax-Sarco Engineering (SPX) 10,780.00p -1.06%
M&G (MNG) 195.75p -0.89%

FTSE 250 - Risers

Micro Focus International (MCRO) 443.60p 10.13%
Rank Group (RNK) 161.60p 5.21%
Petrofac Ltd. (PFC) 169.15p 4.93%
Playtech (PTEC) 414.70p 4.83%
Wood Group (John) (WG.) 328.80p 4.55%
Synthomer (SYNT) 443.60p 4.23%
Henderson Smaller Companies Inv Trust (HSL) 1,072.00p 4.08%
Aston Martin Lagonda Global Holdings (AML) 78.20p 3.92%
Capital & Counties Properties (CAPC) 150.70p 3.43%
Unite Group (UTG) 1,121.00p 3.41%

FTSE 250 - Fallers

Cineworld Group (CINE) 64.66p -11.42%
AJ Bell (AJB) 419.00p -7.51%
TBC Bank Group (TBCG) 1,184.00p -5.28%
4Imprint Group (FOUR) 2,750.00p -3.51%
Hochschild Mining (HOC) 199.90p -3.43%
888 Holdings (888) 278.00p -3.30%
Mediclinic International (MDC) 280.00p -2.64%
Apax Global Alpha Limited (APAX) 179.40p -2.07%
Gamesys Group (GYS) 1,092.00p -1.97%
Ninety One (N91) 218.60p -1.97%