London midday: FTSE extends gains as miners rally; wealth managers hit

(Sharecast News) - London stocks had extended gains by midday on Wednesday, boosted by miners and oil giants, as investors eyed the release of the latest US non-farm payrolls report, but wealth managers were the latest casualty of AI disruption fears.

The FTSE 100 was up 0.8% at 10,431.68.

The payrolls report had been scheduled for release last Friday but was delayed due to the partial US government shutdown.

Susannah Streeter, chief investment strategist at Wealth Club, said the report is expected to show a gradual cooling in the labour market.

"The ideal scenario is that new hires continue to tick up as expected, indicating economic growth is still purring, but that wage growth eases again, giving the Federal Reserve the scope to cut rates, offering relief to businesses and households," she said.

"But if hiring undershoots forecasts, it's set to add to concerns of a bleaker scenario for the US economy ahead. The latest consumer confidence snapshot indicates pessimism is spreading among middle - and lower-income households, which has also supported expectations for two interest rate cuts from the Fed this year."

Kathleen Brooks, research director at XTB, said it won't just be the January report in focus.

"Each January, the Bureau of Labor Statistics in the US release their annual revisions for the year before," she noted. "Economists believe that there will be an 825,000 reduction in US job creation for 2025. If analysts are correct, this would be a huge downside revision that could wipe out all US job gains for 2025. This would suggest a much weaker jobs market in the US than currently expected, and it could have a big impact on the future direction of US growth."

Earlier, figures from the National Bureau of Statistics showed that China's consumer price inflation rose less than expected in January.

The consumer price index increased 0.2% on the year following a 0.8% jump in December, coming in below a forecast of 0.4%.

Food prices fell 0.7% on the year, down from 1.1% growth in December. Non-food inflation also slowed, down to 0.4% growth on the year in January from 0.8% a month earlier.

On the month, consumer prices were up 0.2%, versus expectations for a 0.3% rise.

Core CPI - which excludes food and energy - rose 0.8% on the year, down from 1.2% growth in December.

In equity markets, heavily-weighted miners were among the top performers, with Antofagasta, Rio Tinto and Anglo American all sharply higher. Precious metals miner Fresnillo also rose, along with Hochschild and oil giants BP and Shell.

Russ Mould, investment director at AJ Bell, said: "A recovery in commodity prices after the recent volatility helped give the miners and energy stocks a lift. Oil was supported by US-Iran nuclear deal uncertainty, while gold moved back through $5,000 per ounce."

Engineer Renishaw rallied after saying it expected higher full-year revenue and profit growth despite a mixed market outlook after interim earnings jumped 11.5% on an adjusted basis boosted by strong contributions from the defence and semi-conductor sectors.

Imperial Leather maker PZ Cussons surged as it lifted its full-year profit guidance following a strong first-half performance.

LSEG shares sparked following a Financial Times report that activist hedge fund Elliott Management has built a "significant" stake in the company.

Severn Trent gained as it said its financial performance in the period to 10 February was in line with expectations, with the group also on track to meet its environmental and operational targets.

Budget airline easyJet flew higher after an upgrade to 'buy' from 'neutral' at Citi, while B&M was boosted by an upgrade to 'buy' from 'add' at Peel Hunt.

On the downside, wealth managers slumped after US wealth platform and custodian Altruist unveiled a new AI tax planning tool.

Altruist said the new capability helps advisors create fully personalised tax strategies for clients by reading and interpreting their 1040s, paystubs, account statements, meeting notes, emails, and custodial and CRM data, and applying deep tax logic to the analysis. "All of this is done within minutes," it said.

St James's Place tumbled, while Schroders, Quilter, AJ Bell, Rathbones and Transact owner IntegraFin also fell sharply.

Susannah Streeter said: "The worry is that this is just the tip of the iceberg and fresh efficiencies will be unleashed by AI to disrupt the financial advice and investment industry and reduce the fees which can be charged. As the AI cards are shuffled, the pile of potential losers is mounting up, and speculation about which sector will be hit next is rife."

Software stocks also came under pressure again amid worries about AI disruption, with Relx, Experian, Sage Group and Trustpilot all lower.

Barratt Redrow slumped as it reiterated full-year guidance despite subdued market conditions, following a "resilient" first half.