London open: FTSE gains further after weak US jobs report

(Sharecast News) - London stocks rose in early trade on Friday at the start of what was set to be a quiet session due to the Independence Day holiday in the US, after Thursday's weaker-than-expected non-farm payrolls report tempered rate hike expectations.

At 0845 BST, the FTSE 100 was up 0.3% at 10,687.72, having hit a two-month high the previous day. At the same time, Brent crude was up 0.1% at $71.85 a barrel and West Texas Intermediate was down 0.1% at $68.60.

Patrick Munnelly at Tickmill Group said: "For markets, the payrolls report was enough to take the edge off Fed tightening risk but not enough to declare a clean dovish turn. The labour market trend had been improving before this release; consumption has repeatedly proved more resilient than expected, and employment components in survey data have generally looked better, with firms still expecting to add workers against a backdrop of robust demand.

"Lower energy prices should help, but underlying price momentum remains firm, companies are still passing through cost increases, and inventories look lean. That mix argues against getting too aggressive with rate-cut hopes."

Investors were also mulling a private survey out of China, which showed that activity in the services sector eased less than expected in June.

The RatingDog China general services purchasing managers' index, compiled by S&P Global, fell to 54.1 from 54.4 in May, beating expectations for a reading of 53.0. A reading above 50 indicates expansion, while a reading below signals contraction.

The composite output index dipped to 53.6 in June from 54.0 in May, but remaining above the 50.0 mark for the thirteenth month in a row and above the 12-month average of 52.4.

RatingDog founder Yao Yu said: "Sub-index data indicated a marginal moderation in expansion momentum from May, though overall conditions remained robust. The business activity index posted 54.1, easing from the three-month high recorded in May, yet still exceeding the 12-month average of 53.1. Total new business increased for the forty-second consecutive month, with growth decelerating slightly while remaining at a firm level, supported by domestic demand. A notable positive signal came from external demand, as new export business expanded at the fastest pace so far this year, reinforcing the trend of improvement in overseas orders.

"Price dynamics showed mixed changes. Input costs rose for the sixteenth consecutive month, but the rate of inflation moderated from May's 19-month high, easing cost pressures mildly. Meanwhile, selling prices returned to expansionary territory after two months of marginal contraction, indicating an improvement in service providers' pricing power.

"The labour market continued its positive trajectory. Employment levels expanded for the second consecutive month, with the pace of job creation accelerating further, as firms increased headcount in response to sustained demand improvement."

UK corporate news was scare, but precious metals miner Fresnillo and gold miner Hochschild both shone as gold and silver prices rose.

Close Brothers shot up after an upgrade to 'buy' from 'hold' at Shore Capital.

Harbour Energy was in focus after founder EIG said it had sold its remaining stake in the oil company via a secondary placing of 54.77 million shares to institutional investors by way of an accelerated bookbuild.

The 3.5% stake was placed at 205p a share with gross proceeds of �112m.

Market Movers

FTSE 100 (UKX) 10,687.72 0.33%

FTSE 250 (MCX) 23,541.68 0.53%

techMARK (TASX) 6,062.86 0.45%

FTSE 100 - Risers

Fresnillo (FRES) 2,949.00p 2.47%

SSE (SSE) 2,516.00p 2.32%

Melrose Industries (MRO) 503.20p 2.17%

Weir Group (WEIR) 2,494.00p 2.13%

Abrdn (ABDN) 258.00p 1.89%

Metlen Energy & Metals (MTLN) 42.52p 1.67%

Antofagasta (ANTO) 3,904.00p 1.58%

IMI (IMI) 2,954.00p 1.51%

Barratt Redrow (BTRW) 284.00p 1.50%

Persimmon (PSN) 1,069.50p 1.47%

FTSE 100 - Fallers

InterContinental Hotels Group (IHG) 167.80p -0.89%

Tesco (TSCO) 468.80p -0.80%

BAE Systems (BA.) 1,982.50p -0.65%

Relx plc (REL) 2,343.00p -0.55%

JD Sports Fashion (JD.) 82.58p -0.51%

Unilever (ULVR) 4,620.00p -0.50%

Games Workshop Group (GAW) 21,380.00p -0.47%

Imperial Brands (IMB) 2,810.00p -0.46%

International Consolidated Airlines Group SA (CDI) (IAG) 476.20p -0.44%

Diageo (DGE) 1,532.50p -0.42%

FTSE 250 - Risers

Close Brothers Group (CBG) 431.40p 5.25%

IntegraFin Holding (IHP) 386.50p 3.07%

Quilter (QLT) 203.80p 2.98%

Bridgepoint Group (Reg S) (BPT) 287.60p 2.49%

Pacific Horizon Inv Trust (PHI) 1,156.00p 2.48%

Hochschild Mining (HOC) 506.00p 2.36%

NCC Group (NCC) 128.80p 2.34%

Ashmore Group (ASHM) 217.20p 2.26%

Pan African Resources (PAF) 103.20p 2.17%

Shawbrook Group (SHAW) 347.25p 2.13%

FTSE 250 - Fallers

PPHE Hotel Group Ltd (PPH) 1,600.00p -3.50%

Baltic Classifieds Group (BCG) 183.70p -2.38%

Ceres Power Holdings (CWR) 509.50p -2.30%

Paragon Banking Group (PAG) 761.50p -1.87%

Oxford Nanopore Technologies (ONT) 122.20p -1.37%

Baillie Gifford US Growth Trust (USA) 330.00p -1.35%

Ocado Group (OCDO) 181.30p -1.30%

Cordiant Digital Infrastructure Limited NPV (CORD) 124.50p -1.19%

Victrex plc (VCT) 582.00p -0.85%

Playtech (PTEC) 321.40p -0.81%