CLOSER
UK shares closed out around 11 points lower at 6,353 with Intercontinental Hotels the biggest riser and mining titan BHP Billiton (LON:BLT) the biggest loser.
It came after an extremely strong US non-farm payrolls number even though it pointed to a rise in US interest rates at the end of the year.
The US economy added 271,000 jobs in October compared to forecasts of around 180,000 while the rate of unemployment dropped to 5%, the level that the US central bank considers to be full employment.
The US dollar strengthened on the news.
Chris Beauchamp, at IG Index said: "Unsurprisingly, the big winner of the day was the US dollar, with the dollar index rising by over 1% after the news; US indices, which enjoyed such a good run in October, continued to shed ground, although the sight of more good news for US workers meant that the losses were relatively contained."
The analyst noted that in Europe, the FTSE100 remained under pressure, while the DAX rallied strongly, mostly thanks to weakness in the euro.
Giant global hotelier (LON:IHG) rose over 6% to 2,774p on reports that it is exploring strategic options including a potential sale or merger.
IHG is talking to financial advisers about a possible sale of the group or a tie-up with a rival as the sector consolidates, Bloomberg cited people with knowledge of the matter as saying.
Elsewhere, BHP’s shares were hit on news of the Samarco Mineração mine in Brazil. At least 17 people have died according to local reports and may rise to as many as 40.
Shares in BHP dropped 5.71% to 975p, while Glencore (LON:GLEN) was 4.65% lower to 115.85p as the whole sector was sold off.
Elsewhere, TalkTalk (LON:TALK) shares rose 2.35% to 226.10p after the telecoms company issued an update on the cyber-attack it faced last month.
TalkTalk said the raid exposed details of about 157,000 customers but its scale was much more limited than first thought.
Among the smaller companies, Avation (LON:AVAP) added 0.19% to 134.25p as it said it was buying a Boeing 737-800NG passenger jet currently on lease to a unnamed, but ‘top tier’ Chinese carrier.
Telit Communications (LON:TCM) said Swisscom is to use its Internet of Things (IoT) technology to power the Swiss telecom group's new IoT services, but the shares fell 10.66% to 241p.
Shares in Amerisur Resources (LON:AMER) sank almost 8% as it revealed further analysis was required on the Loto-2 well in Colombia to see if it can be an economic producer.
Tests showed there may be an issue with the mobility of the oil in place, the oiler said.
London Afternoon
London dipped after an extremely strong US non-farm payrolls number even though it point a rise in US interest rates at the end of the year.
The US economy added 271,000 jobs in October compared to forecasts of around 180,000 while the rate of unemployment dropped to 5%, the level that the US central bank considers to be full employment.
The FTSE 100 Index was four points lower at 6,360 despite the jobs numbers ‘sealing the deal’ for a rate rise according to some commentators.
“Today’s report was so strong that even a weak jobs report in November may not be enough to encourage the Fed to wait a little longer, “ said Craig Erlam at foreign exchange trader Oanda.
“Prior to the report, Fed Funds futures were pricing in a 58% chance of a rate hike, that has since risen to 72% offering the FOMC the perfect opportunity to raise rates with minimal disruption.”
Precious metals miners were heavy fallers after the job news led by Randgold Resources (LON:RRS), which shed 4% to 3,974p
Other miners were hit by the tailings dam breach at BHP’s Samarco Mineração mine in Brazil.
At least 17 people have died according to local reports and may rise to as many as 40.
Shares in BHP dropped 7% to 963p, while Glencore (LON;GLEN) was 8% lower at 112p as the whole sector was sold off.
Shares in Intercontinental Hotels (LON:IHG) rose 149p or 5.7% to 2761p on reports that it is exploring strategic options including a potential sale or merger.
IHG is talking to financial advisers about a possible sale of the group or a tie-up with a rival as the sector consolidates, Bloomberg cited people with knowledge of the matter as saying.
In July, there was speculation that IHG was in early-stage talks with Starwood Hotels & Resorts about joining forces, but IHG later said that was not the case.
TalkTalk (LON:TALK) shares rose 6.5p to 232.5p after the telecoms company issued an update on the cyber-attack it faced last month.
TalkTalk said the raid exposed details of about 157,000 customers but its scale was much more limited than first thought.
AstraZeneca (LON:AZN) gained 12p to 4,260p as it announced it was buying US drug company ZS Pharma, which is developing a treatment for potentially dangerous high levels of potassium in the blood, for US$2.7bn.
Among the smaller companies, Avation (LON:AVAP) said it was buying a Boeing 737-800NG passenger jet currently on lease to a unnamed, but ‘top tier’ Chinese carrier. Shares eased slightly to 134p.
Telit Communications (LON:TCM) said Swisscom is to use its Internet of Things (IoT) technology to power the Swiss telecom group's new IoT services, but the shares fell 8.75p to 261p.
Shares in Amerisur Resources (LON:AMER) sank almost 8% as it revealed further analysis was required on the Loto-2 well in Colombia to see if it can be an economic producer.
Tests showed there may be an issue with the mobility of the oil in place, the oiler said.
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LONDON OPEN
London shares edged up on Friday after market gains in Asia prompted by hopes of good US job news.
The FTSE 100 Index climbed four points to 6368 in early trading. The Shanghai Composite closed 67 points ahead and the Nikkei lifted 149 points.
Mike van Dulken at Accendo Markets said: "The positive opening call comes after further gains in Asia, despite small stateside losses, as the strong USD that hindered third quarter corporate results edged further towards August highs thanks to hawkish Fed talk and expectations of a decent US job report.
"This benefited Asian currencies and exporters in turn, while Chinese stocks pushed further into bull market territory on assumptions of further intervention to bolster growth."
In the UK, investors were expected to focus on industrial and manufacturing production figures, which were tipped to have fallen and risen respectively in September.
Back in the market, TalkTalk (LON:TALK) shares rose 11.6p to 232.5p after the telecoms company issued an update on the cyber-attack it faced last month.
TalkTalk said the raid exposed details of about 157,000 customers but its scale was much more limited than first thought.
AstraZeneca (LON:AZN) fell 16.5p to 4230.5p as it announced it was buying US drug company ZS Pharma, which is developing a treatment for potentially dangerous high levels of potassium in the blood, for US$2.7bn.
Shares in BP (LON:BP.) were 0.9p up at 391.35p as oil prices rose, with the cost of a barrel of Brent crude gaining 0.6% to US$48.25. US light crude was also 0.6% ahead at US$45.47. Royal Dutch Shell's stock (LON:RDSB) advanced 4p to 1728p.
News that Avation (LON:AVAP) was buying a Boeing 737-800NG passenger jet currently on lease to a unnamed, but ‘top tier’ Chinese carrier elevated its shares by 0.5p to 134.5p.
Telit Communications (LON:TCM) said Swisscom is to use its Internet of Things (IoT) technology to power the Swiss telecom group's new IoT services, but the shares fell 8.75p to 261p.
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MARKET PREVIEW
All eyes will be on the US job report scheduled for this afternoon, with investors likely to be in wait-and-see mode until they are released.
Economists are tipping the October reading will show the non-farm payrolls rising by around 180,000, following on from September's 142,000 gain.
US markets were little changed yesterday as investors sat on their hands, with the Dow Jones down just five points at 17,863, the Nasdaq Composite off 14 points at 5,128 and the S&P composite a couple of points lower at 2,100.
Despite that slightly negative lead, UK stocks are tipped to open modestly higher, with the FTSE100, which declined 48 points yesterday, looking at a 13 point gain when trading starts this morning, if spread betting quotes are to be believed.
Pundits are still getting to grips with the Bank of England's (BoE) Inflation report, where the tone was anything but hawkish.
“Of course, with inflation back below zero and GDP growth in Q3 having come in below the BoE's previous forecast, a downward revision to the near-term GDP forecasts was to be expected, but while the report emphasised increased concerns about external risks in the face of weakening global growth than three months ago, the Bank's projections for GDP growth this year and next were nudged only marginally lower - by 0.1pt to 2.7%Y/Y and 2.5%Y/Y respectively,” noted Daiwa Securities.
“Perhaps of more significance was the revision to the Bank's expectation for the inflation outlook. Indeed, based on the market implied path of interest rates, the BoE now expects headline CPI [Consumer Price Index] to remain below 1% well into the second half of next year,” the broker added.
The revisions to the near-term inflation forecast arguably increase the chances that the first hike is pushed out beyond May, according to Daiwa.
Asian markets were sending mixed signals as they moved into the last hour of trading with the Nikkei 225 in Japan up 0.8% at 19,266 while the Hang Seng in Hong Kong tumbling 145 points to 22,906.
Chinese shares had another good day, with the Shanghai Composite rising 64 points to 3,586.
Aside from the US jobs report, there is not much scheduled corporate news to whet investors' appetite, with 3i Infrastructure (LON:3IN) and Intu Properties (LON:INTU) the picks of the bunch.