London midday: FTSE edges lower ahead of payrolls report

London stocks had edged lower by midday on Friday as investors eyed the release of the latest US non-farm payrolls report.

The FTSE 100 was down 0.3% at 8,292.01.

Derren Nathan, head of equity research at Hargreaves Lansdown, said: "Today’s main event is the publication of December’s non-farm payrolls, and investors appear somewhat skittish about what this could mean for rate cuts, with US futures in negative territory.

"Economists are expecting the number of positions created to drop by around 70,000 compared to November to 155,000, which is unsurprising due to the tendency for hiring to slow in the run up to the holidays. But if the number comes in stronger than expected, this could fuel worries of an overheating economy. 10-year US Treasury yields are now above 4.7%, the highest seen in 8 months and any signs of excessively tight labour market could drive them even higher.

"The Fed’s not expected to cut rates at its January meeting, and the rhetoric is starting to turn from how many cuts to price in during 2025, to whether we’ll see a cut at all, as inflationary fears linked to Donald Trump’s trade and immigration policies weigh on central bankers’ decision making."

The non-farm payrolls report for November is scheduled for release at 1330 GMT, along with the unemployment rate and average earnings.

In equity markets, Sainsbury’s lost ground as the supermarket chain said it would increase wages by 5% after bumper sales in its key Christmas quarter.

Sales over the four weeks to 4 January rose 3.8%, and Sainsbury's said it expected annual underlying retail operating profit to increase 7% at the mid-point of its £1.01bn - £1.06bn guidance range.

Third-quarter underlying sales rose 2.8%, with grocery up 4.1% and general merchandise and clothing down 0.1%. The Argos business was 1.4% lower during the period.

Elsewhere, shipping services firm Clarkson rallied as it said results for the year to the end of December 2024 were set to be "slightly ahead" of current market expectations.

The company now expects underlying pre-tax profit to be "not less than" £115m. This compares to £109.2m in the year to the end of December 2023.

In broker note action, Reckitt was boosted by an upgrade to ‘overweight’ by Morgan Stanley, while InterContinental was higher after an upgrade to ‘market perform’ at Bernstein.

Persimmon was in the black as UBS upgraded its stance on the housebuilder to ‘buy’.

Haleon was knocked lower by a downgrade to ‘equalweight’ at Morgan Stanley, while Serco fell after a downgrade to ‘hold’ from ‘buy’ at Jefferies.

Market Movers

FTSE 100 (UKX) 8,292.01 -0.33%
FTSE 250 (MCX) 19,868.92 -0.68%
techMARK (TASX) 4,584.12 -0.51%

FTSE 100 - Risers

Reckitt Benckiser Group (RKT) 5,022.00p 2.01%
BP (BP.) 430.10p 1.75%
InterContinental Hotels Group (IHG) 10,040.00p 1.54%
Anglo American (AAL) 2,473.00p 1.37%
Melrose Industries (MRO) 569.20p 1.25%
Shell (SHEL) 2,645.50p 1.22%
Rio Tinto (RIO) 4,853.50p 0.99%
Antofagasta (ANTO) 1,734.00p 0.93%
Persimmon (PSN) 1,100.50p 0.78%
Rightmove (RMV) 646.40p 0.59%

FTSE 100 - Fallers

Beazley (BEZ) 785.50p -3.62%
Sainsbury (J) (SBRY) 254.00p -3.50%
Entain (ENT) 629.40p -2.99%
Marks & Spencer Group (MKS) 335.70p -2.78%
NATWEST GROUP (NWG) 374.30p -2.78%
Tesco (TSCO) 358.70p -2.53%
St James's Place (STJ) 813.50p -2.46%
Hiscox Limited (DI) (HSX) 1,044.00p -2.43%
BT Group (BT.A) 140.35p -2.16%
easyJet (EZJ) 508.00p -1.82%

FTSE 250 - Risers

Clarkson (CKN) 4,225.00p 8.61%
Syncona Limited NPV (SYNC) 93.10p 2.08%
Bodycote (BOY) 639.00p 1.91%
Diversified Energy Company (DEC) 1,377.00p 1.55%
Ninety One (N91) 141.80p 1.29%
Ashmore Group (ASHM) 149.20p 1.22%
Crest Nicholson Holdings (CRST) 159.60p 1.01%
The European Smaller Companies Trust (ESCT) 179.20p 0.90%
Indivior (INDV) 974.00p 0.88%
Vistry Group (VTY) 532.00p 0.85%

FTSE 250 - Fallers

Wizz Air Holdings (WIZZ) 1,265.00p -4.89%
CMC Markets (CMCX) 243.50p -4.32%
Lancashire Holdings Limited (LRE) 624.00p -3.85%
Just Group (JUST) 141.00p -3.29%
Moonpig Group (MOON) 197.00p -3.19%
Greggs (GRG) 2,140.00p -3.17%
Kier Group (KIE) 134.60p -2.75%
RS Group (RS1) 655.50p -2.53%
Bank of Georgia Group (BGEO) 4,475.00p -2.40%
Chemring Group (CHG) 326.50p -2.39%