London open: Stocks rise as investors eye payrolls report

(Sharecast News) - London stocks rose in early trade on Friday as investors eyed the release of the latest US non-farm payrolls report.
At 0830 GMT, the FTSE 100 was up 0.7% at 6,533.33, while the FTSE 250 was 0.4% higher at 20,202.45.

Spreadex analyst Connor Campbell said: "On the final non-farm Friday of 2020, the European markets were broadly positive, with the FTSE continuing to lead the way.

"Up more than half a percent, the FTSE climbed past 6,500, a level last hit almost exactly nine months ago - i.e. during the rapid descent following the first covid-19 outbreak in the UK. Compared to this the pound was far more placid, up 0.1% against the dollar but down 0.1% against the euro.

"Sterling spiked on Thursday following comments from the Irish foreign minister claiming a Brexit deal could be reached 'within days'. Now the latest roadblock has appeared - or, rather, seablock, as arguments over fishing are once again threatening to sink negotiations."

On the macroeconomic front, the payrolls report, unemployment rate and average earnings are all due at 1330 GMT. Ahead of that, Markit's UK construction PMI for November is at 0930 GMT.

CMC Markets analyst David Madden said the payrolls are expected to show that 469,000 jobs were created last month, down from the 638,000 registered in October.

"The unemployment rate is tipped to be 6.8%, down from the 6.9% in previous update, and the yearly average earnings metric is expected to slip from 4.5% to 4.3%. A fall in wages could be viewed as positive for the economy as it could be an indication that more lower-income workers have returned to the workforce," he said.

In equity markets, 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.

Croda rallied after a double upgrade to 'outperform' at Credit Suisse, while conference and exhibitions organiser Hyve rose after an upgrade to 'buy' at Peel Hunt and as Citi reiterated its 'buy' recommendation on the stock.

Gold miner Centamin was boosted by an upgrade to 'buy' at Berenberg.

On the downside, Berkeley Group shares fell 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. Peers followed suit, with Taylor Wimpey, Barratt and Persimmon all trading lower.

Lloyds was also in the red after a downgrade to 'underperform' at Bank of America Merrill Lynch.

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."