London midday: Weak UK production data dampens stocks ahead of US jobs report

Disappointing UK economic data and nervousness ahead of a key labour-market report in the States sent London's FTSE 100 lower on Friday morning, as stocks pulled back after a surge the previous session.By around lunchtime, the Footsie was trading nearly 0.7% lower at 6,527 with weakness among supermarket and housing stocks pulling the index lower.The index had jumped 2.3% to 6,569.96 the day before, its highest finish of the year so far, after supermarket giant Tesco's turnaround plan pleased the market and hopes for further central-bank stimulus in Europe boosted general sentiment.Figures released on Friday showed that UK industrial production unexpectedly declined along withconstruction output in November, falling by 0.1% and 2% month-on-month, respectively. On a positive note, manufacturing output beat forecasts by rising 0.7% and the trade deficit shrank more than expected to £1.4bn."November's figures on industrial production and trade presented a mixed picture of the health of the UK's recovery towards the end of 2014," said analysts at Capital Economics.Looking ahead, the all-important US non-farm payrolls report is due out before the opening bell on Wall Street. The consensus forecast is for a 240,000 increase in payrolls in December, compared with November's better-than-expected 321,000 gain."Chances are probably fairly low that December's unemployment report is on par with the giant leap of 321K in November but anything in and around the 241K expected should be well received by markets," said analyst Jasper Lawler from CMC Markets UK.Data released overnight showed that Chinese factory gate deflation worsened last month, and while Chinese consumer price inflation improved it still remained near a five-year low. The latter, at 1.5% in December, is well below the government's 3.5% target and "points towards the open possibility for monetary easing from the People's Bank of China in the opening months of the year", said analyst Jameel Ahmad from FXTM.Grocers and housebuilders provide a dragSupermarket stocks were under pressure on Friday, with Tesco in particular pulling back after a 15% surge the previous session following the announcement of its turnaround plan and resilient Christmas sales. Rivals J Sainsbury and Wm Morrison were also in reverse after rallying strongly on Thursday.Dampening Tesco's shares was the news that ratings agency Moody's had cut the UK grocer's debt to 'junk', saying that measures announced on Thursday to revive the struggling business "will take time to implement". Analysts said that Tesco's "financial profile is likely to remain leveraged beyond what we consider to be commensurate with an investment-grade profile".Housebuilders such as Barratt Developments, Taylor Wimpey, Redrow and Bellway were trading with heavy losses as analysts at Jefferies downgraded their ratings on stocks across the sector.Mining stocks were also weighing heavily on markets with Fresnillo, Rio Tinto and Glencore among the worst performers.Electronic components supplier Laird, a key Apple supplier, underwhelmed despite announcing its confidence in meeting expectations for full-year results after a good fourth quarter. Organic growth, however, eased towards the end of the year.Restaurant Group, the owner of Frankie & Benny's, Garfunkel's and Chiquito eateries, edged higher after saying that like-for-like sales over the Christmas period were strong and that full-year results will meet the market's forecasts for "material growth". Market MoverstechMARK 2,990.45 -0.22%FTSE 100 6,527.04 -0.65%FTSE 250 16,035.55 -0.31%FTSE 100 - RisersAshtead Group (AHT) 1,158.00p +2.39%Marks & Spencer Group (MKS) 455.20p +1.86%RSA Insurance Group (RSA) 441.40p +1.80%Friends Life Group Limited (FLG) 371.10p +1.64%Aviva (AV.) 490.50p +1.51%Intertek Group (ITRK) 2,466.00p +1.48%Johnson Matthey (JMAT) 3,493.00p +1.07%easyJet (EZJ) 1,633.00p +1.05%Admiral Group (ADM) 1,351.00p +1.05%Bunzl (BNZL) 1,822.00p +0.89%FTSE 100 - FallersTaylor Wimpey (TW.) 126.50p -4.74%Barratt Developments (BDEV) 434.10p -4.53%Persimmon (PSN) 1,479.00p -3.90%Morrison (Wm) Supermarkets (MRW) 178.70p -3.25%Standard Chartered (STAN) 943.40p -2.81%Sainsbury (J) (SBRY) 245.30p -2.81%Royal Bank of Scotland Group (RBS) 368.00p -2.57%Tesco (TSCO) 204.30p -2.37%Glencore (GLEN) 285.95p -2.22%Fresnillo (FRES) 807.50p -2.06%FTSE 250 - RisersHikma Pharmaceuticals (HIK) 2,276.00p +4.64%Catlin Group Ltd. (CGL) 690.00p +4.47%Henderson Group (HGG) 221.40p +3.70%Enterprise Inns (ETI) 109.00p +2.35%Brit (BRIT) 268.50p +2.13%Restaurant Group (RTN) 699.50p +2.12%Allied Minds (ALM) 376.00p +1.98%Ophir Energy (OPHR) 141.20p +1.95%Centamin (DI) (CEY) 63.95p +1.91%Michael Page International (MPI) 428.60p +1.90%FTSE 250 - FallersLaird (LRD) 309.40p -6.72%Drax Group (DRX) 381.20p -4.49%Rightmove (RMV) 2,156.00p -4.39%Vedanta Resources (VED) 508.00p -4.15%Evraz (EVR) 148.10p -3.89%Bellway (BWY) 1,838.00p -3.67%Stagecoach Group (SGC) 350.00p -3.63%Ashmore Group (ASHM) 265.00p -3.53%Berkeley Group Holdings (The) (BKG) 2,364.00p -3.51%Countrywide (CWD) 440.00p -3.21%