A better-than-expected reading of Eurozone manufacturing data helped cement gains for equity markets on Friday morning, as investors await the all-important jobs data due out in the US this afternoon.
Expectations are for a 165,000 rise in US non-farm payrolls in January when numbers are released at 13:30, following the 155,000 increase the month before. However, the unemployment rate is forecast to remain unchanged at 7.8%. Also on the agenda today Stateside is the ISM manufacturing index and the closely-watched University of Michigan confidence survey.
Back on this side of the Pond, Markit's final Eurozone manufacturing purchasing managers' index (PMI) hit an 11-month high of 47.9 in January, higher than last month's mark (46.1). Forecasts were the PMI to be unchanged from the preliminary reading (47.5). While a figure below 50 still indicates a contraction, "the Eurozone economic picture continues to brighten", according to Markit Chief Economist Chris Williamson.
However, the UK's own manufacturing-sector PMI failed to meet expectations, falling from 51.4 to 50.8 in January. The consensus estimate had been for a reading of 51.
Over in China, the manufacturing sector continues to expand: while the HSBC manufacturing PMI beat forecasts, rising from 51.5 to 52.3 in January, the official manufacturing PMI disappointed, falling from 50.6 to 50.4. Nevertheless, analyst James Hughes from Alpari said he was "cautiously optimistic" as both of the numbers are still above 50.
However, markets came off their intraday highs in mid-morning trade on the news that European banks are expected to pay back a smaller-than-expected amount to the European Central Bank (ECB) next week as part of the repayments for the Long-Term Refinancing Operations (LTRO) programme. Banks will repay €3.5bn to the ECB, below the €20bn forcast and well under the €137bn paid last week.
"Traders are now tempering their earlier optimism about the overall state of the banking sector which may not be as healthy as thought last week," said market strategist Ishaq Siddiqi from ETX Capital.
FTSE 100: BT impresses with third-quarter statement
Telecoms giant BT was a high riser this morning after its third-quarter results, as cost control helped it to beat expectations on the bottom line. Pre-tax profit increased by 7.0% in the quarter to £675m, however, revenues fell 6.0% to £4.5bn.
Miners were also performing well this morning as continued growth in China's manufacturing lifted the demand outlook for commodities. Fresnillo and Vedanta Resources were among the best perfomers.
Heading the other way was sweeteners and food products group Tate & Lyle after saying that third-quarter profits, while in line with expectations, were lower than they were last year. The company also warned about the elevated levels of volatile corn prices and the impact of the hot summer last year. "We read the Q3 as cautious in tone and a downgrading influence on numbers," said analyst Martin Deboo from Investec.
Global banking group HSBC was lower after Citigroup cut its rating on the stock to 'neutral'. Meanwhile, Shell was suffering the effects of a downgrade by UBS.
FTSE 250: Lonmin extends gains
Platinum producer Lonmin was continuing to rise after yesterday posting quarterly production ahead of targets despite strikes that hit the South African mining sector last year.
De La Rue, the banknote printer, surged after saying that it had received "some" of the previously delayed orders that it had referred to in the last trading update. The company said that results this year would be flat on 2011/12.
Communications services provider KCOM rose after saying in a third-quarter statement that it has seen "positive momentum across all brands".
Pubs group Greene King was a high riser this morning after HSBC raised its recommendation for the shares
to 'overweight' and lifted its target price from 620p to 750p.
FTSE 100 - Risers
BT Group (BT.A) 261.90p +5.35%
Reed Elsevier (REL) 705.50p +2.69%
Diageo (DGE) 1,922.50p +2.42%
Tullow Oil (TLW) 1,164.00p +2.28%
Vedanta Resources (VED) 1,230.00p +2.16%
ARM Holdings (ARM) 881.50p +2.14%
Fresnillo (FRES) 1,690.00p +1.93%
Anglo American (AAL) 1,919.50p +1.75%
ITV (ITV) 116.80p +1.74%
InterContinental Hotels Group (IHG) 1,887.00p +1.67%
FTSE 100 - Fallers
Tate & Lyle (TATE) 791.00p -2.65%
Royal Dutch Shell 'A' (RDSA) 2,218.00p -1.03%
Royal Dutch Shell 'B' (RDSB) 2,280.50p -0.59%
Hammerson (HMSO) 483.00p -0.56%
HSBC Holdings (HSBA) 713.80p -0.40%
Lloyds Banking Group (LLOY) 51.46p -0.39%
Imperial Tobacco Group (IMT) 2,336.00p -0.38%
Barclays (BARC) 299.95p -0.35%
Legal & General Group (LGEN) 151.90p -0.33%
Capita (CPI) 785.50p -0.19%
FTSE 250 - Risers
De La Rue (DLAR) 958.50p +6.26%
Kenmare Resources (KMR) 34.95p +5.21%
QinetiQ Group (QQ.) 197.50p +5.05%
Bank of Georgia Holdings (BGEO) 1,315.00p +4.95%
Centamin (DI) (CEY) 59.00p +4.33%
Lonmin (LMI) 374.40p +4.00%
Imagination Technologies Group (IMG) 530.00p +3.82%
International Personal Finance (IPF) 418.60p +3.77%
KCOM Group (KCOM) 74.60p +3.76%
Essar Energy (ESSR) 135.30p +3.52%
FTSE 250 - Fallers
New World Resources A Shares (NWR) 281.00p -3.10%
Perform Group (PER) 368.00p -2.65%
PayPoint (PAY) 824.00p -1.49%
BH Macro Ltd. EUR Shares (BHME) € 19.50 -1.37%
Atkins (WS) (ATK) 819.00p -1.27%
Ted Baker (TED) 1,190.00p -1.16%
Mitchells & Butlers (MAB) 330.40p -0.99%
Hiscox Ltd. (HSX) 469.30p -0.99%
Kentz Corporation Ltd. (KENZ) 415.50p -0.98%
Domino's Pizza Group (DOM) 509.50p -0.97%