London midday: Stocks extend gains as Anglo rallies; payrolls eyed

(Sharecast News) - London stocks had extended gains by midday on Friday, with Anglo American leading the advance amid the prospect of a potential bidding war, as investors eyed the latest US non-farm payrolls report. The FTSE 100 was up 0.5% at 8,209.16.

The non-farm payrolls report for April is due at 1330 BST, along with the unemployment rate and average earnings.

Richard Hunter, head of markets at Interactive Investor, said: "The next test of investors' mettle comes later today with the release of the eagerly anticipated non-farm payrolls report, where the consensus is that 243,000 jobs will have been added in April, as compared to 303,000 the previous month, and for the unemployment rate to remain unchanged at 3.8%.

"More recent NFP prints have tended to provide surprises which have resulted in sharp market moves and any large deviation from the consensus in either direction would add to volatility. A particularly high reading, for example, would play against the narrative that higher interest rates are cooling demand, potentially pushing the need for any rate cuts at all further out."

On home shores, a survey showed that service sector output grew in April at its fastest pace since May 2023.

The S&P Global services PMI business activity index rose to 55.0 from 53.1 in March, coming in above the 50.0 mark that separates contraction from expansion for the sixth month in a row.

The composite PMI rose ticked up to 54.1 in April from 52.8 the month before. This marked the sixth consecutive month in positive territory and signalled the fastest expansion of private sector business activity since April 2023.

Tim Moore, economics director at S&P Global Market Intelligence, said: "Service providers benefited from improving business and consumer spending in April as more favourable demand conditions underpinned the greatest improvement in activity since May 2023. The latest survey results are consistent with the UK economy growing at a quarterly rate of 0.4% and therefore pulling further out of last year's shallow recession.

"Relief at a turnaround in the economic outlook was commonly cited as a factor supporting sales pipelines in April. However, there were also reports that clients remained somewhat risk averse and under pressure from elevated inflation. These undercurrents constrained margins and meant that some service sector companies were cautious about taking on more staff. The overall rate of job creation was only marginal in April and slipped to its weakest so far in 2024."

Investors were also mulling industry data showing that retail footfall fell sharply in April, hit by poor weather and the early timing of Easter.

In equity markets, Anglo American was sitting pretty at the top of the FTSE 100 following a Reuters report that Glencore is studying an approach for the miner after it rejected a £31bn proposal from BHP. Glencore was in the red.

Diageo fizzed higher as the drinks group said it was appointing Nik Jhangiani - the head of finance from Coca-Cola Europacific Partners - as its new chief financial officer.

Online rail ticket selling platform Trainline surged as it reported better-than-expected revenue along with a sharp jump in annual sales and profits, driven by competition for passengers in Spain and Italy along with a greater take-up of digital tickets in the UK.

On the downside, InterContinental Hotels Group fell as it reported a substantial easing in revenue per available room (RevPAR) growth in the first quarter as weakness in the Americas and a big slowdown in China limited progress.

Packaging firm Mondi was also weaker after a first-quarter trading update.

In broker note action, Jefferies downgraded AJ Bell and Tyman to 'hold' from 'buy'.

British Land was cut to 'equalweight' from 'overweight' by Barclays.

Market Movers

FTSE 100 (UKX) 8,209.16 0.45% FTSE 250 (MCX) 20,072.57 0.10% techMARK (TASX) 4,641.84 0.89%

FTSE 100 - Risers

Anglo American (AAL) 2,750.00p 3.33% Rightmove (RMV) 538.60p 2.24% Smurfit Kappa Group (CDI) (SKG) 3,754.00p 2.18% Burberry Group (BRBY) 1,175.00p 2.17% Berkeley Group Holdings (The) (BKG) 4,898.00p 2.00% WPP (WPP) 820.00p 1.96% Rolls-Royce Holdings (RR.) 413.70p 1.77% Relx plc (REL) 3,342.00p 1.77% BAE Systems (BA.) 1,352.00p 1.69% Convatec Group (CTEC) 253.40p 1.60%

FTSE 100 - Fallers

InterContinental Hotels Group (IHG) 7,602.00p -3.63% Glencore (GLEN) 452.85p -1.28% Mondi (MNDI) 1,544.50p -0.61% Fresnillo (FRES) 555.00p -0.54% BP (BP.) 513.30p -0.48% AstraZeneca (AZN) 12,102.00p -0.44% Whitbread (WTB) 2,990.00p -0.37% easyJet (EZJ) 545.00p -0.33% Tesco (TSCO) 299.00p -0.27% Coca-Cola HBC AG (CDI) (CCH) 2,630.00p -0.23%

FTSE 250 - Risers

Aston Martin Lagonda Global Holdings (AML) 143.50p 7.73% Trainline (TRN) 323.00p 7.31% Genus (GNS) 1,846.00p 3.48% Tritax Eurobox (GBP) (EBOX) 57.90p 2.48% SDCL Energy Efficiency Income Trust (SEIT) 61.00p 2.35% PureTech Health (PRTC) 218.50p 2.10% Indivior (INDV) 1,469.00p 2.01% Ithaca Energy (ITH) 114.20p 1.96% OSB Group (OSB) 421.80p 1.93% IG Group Holdings (IGG) 776.00p 1.90%

FTSE 250 - Fallers

Bank of Georgia Group (BGEO) 4,700.00p -7.66% TBC Bank Group (TBCG) 3,030.00p -7.48% Bakkavor Group (BAKK) 119.00p -3.25% Hiscox Limited (DI) (HSX) 1,142.00p -2.81% Endeavour Mining (EDV) 1,627.00p -2.63% Foresight Group Holdings Limited NPV (FSG) 457.00p -2.35% VinaCapital Vietnam Opportunity Fund Ltd. (VOF) 470.00p -2.29% Close Brothers Group (CBG) 470.40p -1.88% Apax Global Alpha Limited (APAX) 147.40p -1.73% TI Fluid Systems (TIFS) 140.00p -1.55%