The FTSE 100 Index teetered in positive territory on Thursday despite a stronger pound and more pressure on commodities.
The Footsie pared earlier gains to stand about eight points up at 6790, although the UK-focused FTSE 250 rebounded about 153 points on upbeat manufacturing data. Small-cap indices were also in the black.
The sharp rise in UK manufacturing purchasing manager's index figures for August surprised many given EU referendum jitters, boosting the pound.
But Pantheon Macroeconomics urged caution, saying exports would have benefited disproportionately from the fall in sterling after the June 23 vote.
It added: “We would caution against concluding that the dominant services sector also has experienced a sudden transformation.”
With Chinese manufacturing creeping out of contraction territory, mining stocks got a boost, but it failed to last.
BHP Billiton plc (LON:BLT) backtracked 1.5% to 974.7p, Randgold Resources was 0.9% down at 7085p and Fresnillo PLC (LON:FRES) lost 0.75% to 1594p.
Among small-caps, shares in Ceres Power Holdings plc (LON:CWR) revved up 11.4% to 10.25p on news of a deal with Cummins to develop fuel cells to power data centres.
ECR Minerals PLC (LON:ECR) appointed Craig Brown, who joined the board on May 3 as part-time finance chief, as chief executive with immediate effect. Its shares rose 36% to 0.01p.
Shares in Alumasc Group plc (LON:ALU) advanced 6.3% to 174.4p as the building products group posted higher orders, revenue, profit and dividends.
And Stratex International plc (LON:STI) powered up 11.3% to 1.98p after the West Africa and Turkey-focused miner said long-serving chief executive Bob Foster was stepping down to be replaced by Marcus Engelbrecht, the former managing director of Archipelago Resources plc.
But ZincOx Resources plc (LON:ZOX) plunged by 43% to 0.4p as the group decided against using the ISDX market as a further platform to trade the company's shares.
African Potash Ltd (LON:AFPO) was also in the red as the group said it was raising £500,000 before costs in a share subscription. Its shares dropped 31% to 0.23p.
Back in the top flight, the biggest riser was Lloyds Banking Group PLC (LON:LLOY) with a 4.2% gain to 61.84p.
At the other end of the scale, Hikma Pharmaceuticals Plc (LON:HIK) was on its sick bed with a 2.7% fall to 2082p.
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London’s FTSE 100 Index is expected to open in positive territory on Thursday, albeit not by much, as investors keep an eye on macroeconomics and monetary policy.
As they watch and wait for news from central bankers, tomorrow’s influential US employment statistics will come sharply into focus.
The monthly non-farm payroll numbers are a gauge of the job market, which is itself a priority for the Federal Reserve.
The stats, released tomorrow, will as always provide a feature for trading in the coming days.
They will likely draw more attention due to the scrutiny on September’s scheduled Fed policy meeting, a get-together that some now expect will bring a tightening of monetary conditions.
“Having seen European stock markets post some decent August gains, investor attention is now set to return to the potential next steps of central bank policymakers in the coming days and weeks, in the wake of some rather disappointing economic reports from both sides of the Atlantic in the past few days,” said Michael Hewson, analyst at CMC Markets.
“This concern about future central bank policy may well have been the reason why the S&P500 slipped back to post its first negative month since January, though a slide in oil prices didn’t exactly help either.”
Wall Street closed negatively on Wednesday. The Dow Jones gave up just over 53 points, 0.29%, to end the day at 18,400. The S&P 500 and Nasdaq also moved lower, down 0.24% and 0.19% to 2,170 and 5,213 respectively.
Asian stock trading was mixed. Japan’s Nikkei edged slightly higher to 16,901, while Hong Kong’s Hang Seng added 0.58% to 23,109. The Shanghai Composite, meanwhile, dipped 0.22% to 3,078.
Australia’s ASX 200 was down 0.29% to change hands at 5,418.
In London, IG Markets sees the FTSE 100 about 20 points higher as the spreadbetting and CFD group is calling the benchmark at 6,804 to 6,808 about an hour before trading kicks off.
Anticipated company news
Investors will be watching nervously for any sign of a ‘Brexit’-linked hiring slowdown in the UK when recruitment firm Hays plc (LON:HAS) reports final results on Thursday.
Hays could get a boost from the plunge in sterling since the EU vote, with management saying in an earlier trading update that annual earnings would rise £22mln if exchange rates stayed at their level on July 12.
But analysts at Numis Securities said the impact of the referendum outcome remained the key factor.
Investors in building products group Alumasc Group Plc (LON:ALU) are hoping it may unveil news of windfalls when it reports full year results.
Analysts at Peel Hunt said its balance sheet was in good shape and would allow it “to make choices with regards to investment, acquisitions or cash returns.”
Elsewhere, self-storage group Safestore Holdings Plc (LON:SAFE) was being tipped to give a positive trading update despite uncertainty caused by the EU referendum.