The FTSE 100 was trading within a narrow range on Monday morning as traders remained cautious following a barrage of mixed economic data over the past few days.
With indices across the globe trading at (or close to) record highs, markets are appearing to pause for breath after a strong run so far this year. Nevertheless, London's benchmark index was trading slightly higher by lunchtime, extending its year-to-date rise to over 10%.
Stocks rallied on Friday after the all-important US employment report smashed forecasts. The US economy created 236,000 jobs in February, well ahead of the 160,000 estimate, causing the jobless rate to unexpectedly fall to 7.7%.
However, the bullish mood was tempered by a number of headwinds this morning, including data from economic powerhouse China which showed that industrial production weakened in February, lending and retail sales growth slowed while inflation climbed.
The move by Fitch Ratings to downgrade its credit rating for Italy was also weighing on the mood today. Fitch has lowered Italy to 'BBB+' from 'A-' and kept the outlook at 'negative', saying that last month's inconclusive elections make it unlikely a stable new government can be formed in the next few weeks. A worse-than-forecast economic growth figure was also dampening sentiment surrounding Italy this morning.
Elsewhere in the Eurozone, Germany reported a larger-than-expected increase in exports in January, while French industrial output dropped more than expected.
Matt Basi, Head of UK Sales Trading at CMC Markets, said this morning that ahead of the UK industrial production figures due out tomorrow morning, "bearish CMC Markets clients are positioning themselves for a correction in the FTSE 100 - a startling 93% of clients with positions in the index are short. "
FTSE 100: Sage hit by Bank of America downgrade
Accountancy software giant Sage suffered a steep fall after Bank of America Merrill Lynch downgraded its rating for the stock from 'neutral' to 'underperform'. The broker said in a research note that investors should remain cautious as to whether Sage can pull off its move to cloud computing.
Airline group IAG edged higher after saying it has opted to accept a proposal put forth by a mediator regarding its Spanish unit Iberia. According to a news article published by Reuters , the mediator proposed that the Spanish airline cut 3,141 jobs rather than the 3,807 that the airline had planned to let go. The proposal also reportedly entitled those subject to the lay-offs with severance pay of 35 days per year worked, rather than 20.
Oilfield services group Petrofac was slightly higher after being awarded a project management contract by Petróleos Mexicanos (PEMEX) for technical assistance and supervision for the Lakach project offshore Mexico.
Meanwhile, liquor giant Diageo rose after saying an overhaul of its global supply operations will lead to cost savings of £60m per annum over the next three years.
FTSE 250: Ladbrokes gains on Playtech deal
Ladbrokes surged after unveiling plans to extend its relationship with online gaming software company Playtech as part of the former's 're-invigoration' of its Digital business.
Software company Anite plummeted early on after saying that third-quarter trading reflected a relatively quiet seasonal period. Investec downgraded the stock to 'hold' this morning.
Oil and gas group Ophir Energy also dropped with analysts saying that the stock hit technical resistance in the form of its primary downtrend line.
Real estate firm Raven Russia was up after saying that operating profit rose 63% in 2012, underpinned by profitable acquisitions.
FTSE 100 - Risers
Serco Group (SRP) 638.50p +1.92%
Morrison (Wm) Supermarkets (MRW) 267.80p +1.83%
British Sky Broadcasting Group (BSY) 875.50p +1.80%
SABMiller (SAB) 3,463.50p +1.72%
BT Group (BT.A) 271.40p +1.65%
Pearson (PSON) 1,184.00p +1.63%
Severn Trent (SVT) 1,645.00p +1.48%
United Utilities Group (UU.) 721.50p +1.41%
Antofagasta (ANTO) 1,082.00p +1.22%
Vodafone Group (VOD) 186.45p +1.14%
FTSE 100 - Fallers
Sage Group (SGE) 338.50p -3.12%
Evraz (EVR) 259.90p -2.84%
Kazakhmys (KAZ) 519.00p -2.54%
Barclays (BARC) 311.20p -2.32%
Royal Bank of Scotland Group (RBS) 299.60p -2.16%
Carnival (CCL) 2,487.00p -1.66%
GKN (GKN) 278.80p -1.45%
Lloyds Banking Group (LLOY) 49.45p -1.25%
Land Securities Group (LAND) 837.50p -1.18%
Resolution Ltd. (RSL) 266.80p -1.15%
FTSE 250 - Risers
Ladbrokes (LAD) 241.20p +7.10%
Stobart Group Ltd. (STOB) 88.00p +4.02%
Ocado Group (OCDO) 139.50p +3.72%
Dignity (DTY) 1,410.00p +3.22%
Berendsen (BRSN) 740.00p +3.06%
Raven Russia Ltd (RUS) 67.25p +2.91%
Playtech Ltd. (PTEC) 567.00p +2.81%
WH Smith (SMWH) 724.00p +2.69%
EnQuest (ENQ) 140.10p +2.64%
FirstGroup (FGP) 197.30p +1.96%
FTSE 250 - Fallers
Ophir Energy (OPHR) 452.40p -13.33%
Anite (AIE) 135.40p -12.65%
RPS Group (RPS) 247.00p -4.26%
Ferrexpo (FXPO) 211.40p -3.78%
Bellway (BWY) 1,107.00p -3.66%
ICAP (IAP) 330.20p -3.62%
Pace (PIC) 221.30p -3.53%
Bovis Homes Group (BVS) 655.00p -2.67%
Michael Page International (MPI) 439.80p -2.66%
Tullett Prebon (TLPR) 268.00p -2.62%