|CATEGORY: MARKET REPORT - MIDDAY
Fri 01 Sep 2017
LONDON (SHARECAST) - (ShareCast News) - London stocks were holding on to mild gains by midday on Friday following the release of strong manufacturing data, as investors held off from making any big bets ahead of the non-farm payrolls report later in the day.
The FTSE 100 was up 0.3% to 7,449.47, while the pound was flat against the euro and the dollar at 1.0856 and 1.2933, respectively.
Meanwhile, oil prices gushed lower as the storm that was Hurricane Harvey paralysed more than a quarter of the US refining industry. West Texas Intermediate was down 1.2% to $46.68 a barrel and Brent crude was off 1% to $52.32.
Data released earlier showed UK manufacturing activity last month surprisingly strengthened to its second best level in three years as output, new orders and rates of hiring all improved.
Markit's purchasing managers' index for August rose to 56.9 from the 55.1 a month before and above the 55.0 consensus expected by analysts.
Production rose at the steepest pace in seven months, Markit said, underpinned by faster intakes of new work received, while rates of expansion in both were among the best since mid-2014.
With all manufacturing sectors benefiting, the domestic market was said to be the prime source of new contract wins, though new export business remained "robust" but not quite at July's near-record high.
The broad strength of the survey added weight to economist Andrew Wishart at Capital Economics' view that the sector will put a disappointing first half to the year behind it.
On the basis of past form, he said the output balance was consistent with quarterly growth of about 1.0% in the sector, also noting that the input prices balance reversed some its previous decline reflecting the recent slide in the pound.
Still to come on the data front, investors will pay close attention to the US the payrolls report and average hourly earnings when announced at 1330 BST alongside the unemployment rate.
Consensus is for a gain of 180,000 in payrolls, which would be down a little from July's 209,000 but would still keep the six-month rolling average above 180,000. Meanwhile, the unemployment rate is expected to hold steady at 4.3%, back at lows last seen over 16 years ago, and before then back in the late sixties.
David Morrison, senior market strategist at SpreadCo, said: "This low rate of unemployment has led some FOMC members to worry that inflation could suddenly surge higher. Certainly the employment picture has been improving across the Euro zone, Japan and UK, where central banks have kept monetary policy loose.
"This is why investors will also keep a close eye on today's average hourly earnings release as any pick-up in wage growth should encourage the hawks within the Fed."
In corporate news, Indivior lost more than a third of its value as it said there was a "material" risk to revenue after a US court ruled that a generic version of its Suboxone film to treat opioid addiction by Dr Reddy's does not infringe any of the London-listed company's patents. Indivior, which generated around 80% of revenue last year from Suboxone - is set to appeal the decision.
Digital property and household-related services owner ZPG rose after announcing the acquisition of Ravensworth, the "UK's leading provider" of on-demand print and creative marketing services to estate and letting agents, for an undisclosed sum.
Rio Tinto was in the black after confirming the completion of the sale of its wholly-owned subsidiary Coal & Allied Industries Limited to Yancoal Australia.
Micro Focus completed its merger with HPE Software on Friday, returned capital and consolidated its shares.
Greene King was hit by a downgrade to 'reduce' at HSBC, while JD Wetherspoon fell after a downgrade to 'hold' by the same outfit and Dixons Carphone was dragged lower by a cut to 'hold' at Investec.
FTSE 100 (UKX) 7,449.47 0.25%
FTSE 250 (MCX) 19,766.43 -0.19%
techMARK (TASX) 3,430.44 0.35%
FTSE 100 - Risers
TUI AG Reg Shs (DI) (TUI) 1,333.00p 1.91%
Paddy Power Betfair (PPB) 6,945.00p 1.91%
Shire Plc (SHP) 3,899.00p 1.71%
G4S (GFS) 287.70p 1.48%
Tesco (TSCO) 183.55p 1.46%
Antofagasta (ANTO) 1,050.00p 1.45%
Ashtead Group (AHT) 1,684.00p 1.26%
Glencore (GLEN) 363.95p 1.24%
CRH (CRH) 2,746.00p 1.14%
GKN (GKN) 322.30p 1.07%
FTSE 100 - Fallers
Provident Financial (PFG) 870.00p -1.47%
Land Securities Group (LAND) 999.00p -1.09%
Kingfisher (KGF) 296.00p -0.97%
Convatec Group (CTEC) 284.20p -0.94%
Royal Mail (RMG) 390.90p -0.84%
British Land Company (BLND) 607.00p -0.74%
Mediclinic International (MDC) 760.00p -0.59%
BT Group (BT.A) 290.85p -0.58%
WPP (WPP) 1,412.00p -0.56%
FTSE 250 - Risers
Sophos Group (SOPH) 523.00p 3.98%
Ferrexpo (FXPO) 309.50p 3.41%
Dunelm Group (DNLM) 603.50p 3.25%
Daejan Holdings (DJAN) 6,140.00p 3.19%
Dechra Pharmaceuticals (DPH) 1,968.00p 2.88%
Polypipe Group (PLP) 406.60p 2.73%
ZPG Plc (ZPG) 361.50p 2.55%
Kaz Minerals (KAZ) 860.50p 2.38%
Syncona Limited NPV (SYNC) 167.70p 2.32%
JD Sports Fashion (JD.) 331.60p 2.31%
FTSE 250 - Fallers
Indivior (INDV) 268.40p -35.57%
Evraz (EVR) 316.30p -5.64%
TBC Bank Group (TBCG) 1,616.00p -4.15%
Greene King (GNK) 666.50p -3.34%
Petrofac Ltd. (PFC) 405.40p -3.11%
Tullow Oil (TLW) 151.40p -3.01%
Carillion (CLLN) 42.88p -2.79%
Halfords Group (HFD) 314.30p -2.66%
CLS Holdings (CLI) 217.10p -2.30%
Polymetal International (POLY) 865.00p -2.20%