London midday: Stocks edge up as pound slips back against dollar; payrolls eyed
London stocks managed to tick higher by midday on Friday as investors digested mixed economic news and awaited the release of US payrolls data, with the pound giving back early gains on the dollar fuelled by the breakthrough in Brexit talks.
The FTSE 100 was up 0.3% to 7,344.61, while the pound held its own against the euro, gaining 0.3% to 1.1479, having hit a six-month high of 1.1510 earlier. However, sterling lost steam to trade flat against the dollar at 1.3468.
David Morrison, chief market analyst at GKFX, said: "Cable rallied in early trade this morning adding to yesterday’s sharp gains following a breakthrough in Brexit negotiations overnight - a development which seemed impossible at the beginning of this week. However, sterling subsequently pulled back from its best levels after poking its nose above 1.3500 versus the dollar.
"This has proved a disappointment to some traders who expected the pair to retest resistance around 1.3600. However, it feels as if the pound needs to consolidate now a build up some resilience before making another push higher. It looks as if there’s some profit-taking coming in as we could have to wait a while for further good news. But there’s support around 1.3400 and if this holds next week we should see sterling make further gains."
In addition, the dollar was being propped up by the fact that the Senate and House approved a two-week funding bill on Thursday, averting a government shutdown this weekend.
Earlier, European Commission President Jean-Claude Juncker said "sufficient progress" was felt to have been made in the first phase of Brexit talks and recommended that the discussions move on to the next stage after both sides reached a preliminary agreement following a week of negotiations.
Prime Minister Theresa May said the deal would ensure there would be no hard border in Ireland, while EU citizens living in the UK will be able to go on living as before.
Juncker said the outcome of the first phase of talks was "of course a compromise" and that negotiations had been "difficult" for both sides. The text needs to be signed off by leaders of the EU member states at a summit next week.
Looking ahead to the rest of the day, all eyes will be on the release of the US non-farm payrolls report, unemployment rate and wage data at 1330 GMT.
Ahead of that though, economic releases in the UK painted a mixed picture. Industrial production growth slowed to a temporary halt in October after a six-month growth spurt, while manufacturing production grew 0.1% on the month, beating expectations for a flat reading.
Meanwhile, the trade deficit widened again in the three months to October, while construction output contracted, although new orders surged to their highest level on record.
In corporate news, housebuilders got a boost as Berkeley Group said it now expects to generate pre-tax profit of £3.3bn in the five years to 2021, up from £3bn previously and reported a 36% jump in half-year profit. Berkeley surged 9%, with Persimmon, Barratt Developments, Taylor Wimpey, Bovis Homes and Bellway all in the black.
Hammerson, which announced on Thursday a £3.4bn takeover deal for rival Intu Properties, was boosted by an upgrade to 'buy' at Goldman Sachs, having fallen in the previous session.
Vodafone was higher after confirming the end of its merger talks with Melita, putting the blame on regulators in Malta.
International Airlines Group flew higher after saying that its subsidiary, British Airways, has decided to launch a flexible benefits scheme incorporating a new defined contribution pension scheme.
John Laing gained ground after it said total investment commitments to date were well ahead of its original guidance for 2017, while IP Group rose after saying that its portfolio company Mirriad, has successfully priced its IPO.
Halma was hit by a downgrade to 'underweight' at JPMorgan Cazenove.
Market Movers
FTSE 100 (UKX) 7,344.61 0.33%
FTSE 250 (MCX) 19,888.64 0.40%
techMARK (TASX) 3,422.62 0.37%
FTSE 100 - Risers
Berkeley Group Holdings (The) (BKG) 4,210.00p 9.46%
Barratt Developments (BDEV) 635.21p 4.48%
Lloyds Banking Group (LLOY) 67.00p 3.86%
Barclays (BARC) 197.65p 3.13%
Taylor Wimpey (TW.) 203.20p 3.09%
Persimmon (PSN) 2,680.79p 2.87%
ITV (ITV) 163.20p 2.71%
Hammerson (HMSO) 518.50p 2.07%
International Consolidated Airlines Group SA (CDI) (IAG) 634.00p 1.68%
Paddy Power Betfair (PPB) 8,590.00p 1.60%
FTSE 100 - Fallers
Intertek Group (ITRK) 5,070.00p -1.36%
Informa (INF) 729.94p -1.09%
British American Tobacco (BATS) 4,909.00p -1.00%
Unilever (ULVR) 4,134.50p -0.92%
Diageo (DGE) 2,612.50p -0.84%
Relx plc (REL) 1,701.00p -0.82%
Worldpay Group (WPG) 415.70p -0.74%
BP (BP.) 484.70p -0.72%
Rolls-Royce Holdings (RR.) 837.50p -0.71%
Old Mutual (OML) 196.40p -0.61%
FTSE 250 - Risers
Crest Nicholson Holdings (CRST) 531.50p 4.94%
Dunelm Group (DNLM) 720.00p 4.65%
Bellway (BWY) 3,615.00p 4.09%
Greencore Group (GNC) 223.45p 3.88%
IP Group (IPO) 150.30p 3.58%
TalkTalk Telecom Group (TALK) 152.90p 2.96%
Countryside Properties (CSP) 351.20p 2.84%
Redrow (RDW) 642.00p 2.72%
Safestore Holdings (SAFE) 472.50p 2.72%
Bovis Homes Group (BVS) 1,161.00p 2.65%
FTSE 250 - Fallers
Investec (INVP) 455.10p -5.78%
Stagecoach Group (SGC) 175.00p -2.94%
Renishaw (RSW) 5,025.00p -2.52%
Provident Financial (PFG) 790.36p -2.00%
Wood Group (John) (WG.) 668.50p -1.91%
Halma (HLMA) 1,250.00p -1.88%
Saga (SAGA) 136.90p -1.65%
Sophos Group (SOPH) 541.50p -1.63%
Tate & Lyle (TATE) 673.50p -1.46%
Vectura Group (VEC) 98.30p -1.40%