Stocks were trading broadly flat on Friday morning with just 10 points separating the FTSE 100's intraday low and high, with markets showing caution ahead of the US employment report out in the next few hours.
The Footsie began today's session in the red as investors digested last night's release of the minutes of the latest Federal Reserve meeting Stateside. While there was a clear majority in favour of further asset purchases (the third round of quantitative easing, or QE3), Federal Open Market Committee (FOMC) members were divided on the timing of these purchases.
"In the end, those who suggested an end to the bond-buying programme currently employed were split between either halting the programme in mid-2013 or doing so at the end of the year," explained research analyst Joshua Mahony from Alpari.
"It was widely expected that the asset purchases were set to run through to the end of the year at a minimum, since this is when Fed Chairman Ben Bernanke's current term is set to come to an end. Bernanke has previously announced that he envisages employing this current QE policy until the end of his tenure and as such the announcement of wrapping it up by the close of 2013 would not come as a massive shock to the markets," Mahony said.
Nevertheless, London's blue-chip index came off its lows by midday with a strong rise by oil titan BP limiting losses.
"BP was the missing ingredient in the FTSE 100's December/Santa Rally, and the reason it could not quite crack 6,000 until the New Year," said Zak Mir, senior analyst at Institute of Trading and Portfolio Management.
"Now the oil giant is likely to hold the key to the UK index maintaining 6000 and perhaps even achieving the ultimate technical goal of a 6,300 target. From now it will be worth checking to see whether the BP share price can remain above its 200 day moving average at 434p - above which the UK index should be above 6000," he said.
Economic data in focus after services PMI disappoints
The UK service sector purchasing managers' index (PMI) for the month of December fell to 48.9, after a reading of 50.2 for the previous month. Consensus forecasts for no change.
Investors will also be keeping a close eye on the US today ahead of the release of unemployment figures. Consensus expectations are for a 145,000 gain in non-farm payrolls in December, similar to the 146,000 rise seen the month before. The jobless rate is forecast to remain unchanged at 7.7%.
BP gains after Transocean settlement
Deepwater Horizon rig owner Transocean has reached a $1.4bn settlement with the US Department of Justice, causing shares
in operator BP to rise in London. Transocean, the world's largest offshore drilling contractor, agreed yesterday to plead guilty to one misdemeanour violation of the Clean Water Act for "negligent discharge of oil into the Gulf of Mexico".
Nevertheless, the wider resource sector was under the weather this morning, with Fresnillo, Randgold, Petrofac and Polymetal all registering losses. Fresnillo was the heaviest faller after UBS cut its recommendation for the shares to 'neutral'. Analyst Chris Lichtenheldt noted that the stock currently trades at 1.26 times net asset value and 18.7 times 2013 cash flow, 48% and 44% higher than the North American peer group, respectively.
Sector peer Anglo American was also in the red after agreeing to sell its 70% interest in the Amapá iron ore mine in Brazil. The terms of the deal with Zamin Ferrous are confidential and subject to state regulatory approval, but the company said it was expected to complete in 2013.
High Street retailer Marks & Spencer (M&S) fell after Nomura lowered its full-year (ending March 2013) profit before tax forecast from £694m to £666m, based on recent Kanta market data.
Real estate investment trust Hammerson was dampened by Credit Suisse after the broker downgraded its rating for the stock to 'neutral'.
Power systems giant Rolls-Royce fell despite revealing that it is to provide repair and support services for aircraft engines operated by the US Marine Corps and Air Force as part of a contract worth $52.2m.
Balfour Beatty, the FTSE 250 global infrastructure group, was also lower despite saying that it has been awarded a five-year highway maintenance contract by Wiltshire Council.
FTSE 100 - Risers
BP (BP.) 448.50p +1.54%
Standard Life (SL.) 350.50p +1.18%
British American Tobacco (BATS) 3,158.50p +1.10%
Experian (EXPN) 1,026.00p +1.08%
Hargreaves Lansdown (HL.) 711.50p +1.07%
Tate & Lyle (TATE) 790.00p +1.02%
BT Group (BT.A) 240.20p +0.80%
Burberry Group (BRBY) 1,271.00p +0.79%
SSE (SSE) 1,460.00p +0.69%
Bunzl (BNZL) 1,028.00p +0.59%
FTSE 100 - Fallers
Fresnillo (FRES) 1,778.00p -5.68%
Randgold Resources Ltd. (RRS) 5,995.00p -3.77%
Polymetal International (POLY) 1,174.00p -3.69%
Marks & Spencer Group (MKS) 375.10p -3.42%
Anglo American (AAL) 1,970.50p -2.18%
Kazakhmys (KAZ) 808.00p -2.18%
Evraz (EVR) 274.80p -2.07%
Antofagasta (ANTO) 1,344.00p -1.90%
Rio Tinto (RIO) 3,592.00p -1.82%
Hammerson (HMSO) 488.20p -1.79%
FTSE 250 - Risers
Bank of Georgia Holdings (BGEO) 1,160.00p +5.45%
Laird (LRD) 221.10p +3.03%
Chemring Group (CHG) 261.00p +2.92%
Jupiter Fund Management (JUP) 301.50p +2.73%
Stobart Group Ltd. (STOB) 103.00p +2.18%
Centamin (DI) (CEY) 39.99p +2.07%
Domino Printing Sciences (DNO) 619.00p +1.64%
Bovis Homes Group (BVS) 591.50p +1.63%
Dechra Pharmaceuticals (DPH) 618.00p +1.56%
Pennon Group (PNN) 650.00p +1.48%
FTSE 250 - Fallers
Hochschild Mining (HOC) 473.20p -3.74%
Petropavlovsk (POG) 363.70p -3.04%
Bumi (BUMI) 267.00p -2.91%
Lonmin (LMI) 288.00p -2.83%
Invensys (ISYS) 324.80p -2.75%
Kentz Corporation Ltd. (KENZ) 382.80p -2.69%
AZ Electronic Materials SA (DI) (AZEM) 353.90p -2.64%
Kenmare Resources (KMR) 34.10p -2.52%
Renishaw (RSW) 1,985.00p -2.26%
Premier Oil (PMO) 347.80p -1.81%