The FTSE 100 was broadly flat on Friday morning, swinging between gains and losses as equity markets searched for direction following a steep sell-off the day before in the UK and US.
The London benchmark lost 1.6% on Thursday after better-than-expected jobless claims data in the States ignited concerns that the Federal Reserve will soon begin to taper its quantitative easing programme. Wall Street indices declined at a similar rate with the Dow Jones Industrial Average losing 225 points, its worst one-day drop in two months.
"After yesterday's sell-off in the wake of better-than-expected jobless claims data, we appear to be back in 'good-news-is-bad-news' territory, making trading risk assets in these thin summer conditions an even trickier business," said Matt Basi, Head of UK Sales Trading at CMC Markets.
"A relatively quiet macro calendar may lead to a day of low volume technical trading, with the recent market weakness having left major indices perched on key support levels," he said.
The ongoing violence and rising death toll in Egypt also continues to a worry for markets with oil prices
advancing given the disruption risk to supplies coming through the Suez Canal.
The Eurozone consumer price index was the only major economic data release this morning, which showed that inflation remained stable at an annual rate of 1.1% in July.
Data from the States will once again be in focus later on with building permits, housing starts and the University of Michigan confidence survey on tap this afternoon.
Miners, housing stocks lead upside
Mining stocks were providing support this morning with precious metals peers Randgold and Fresnillo leading the risers by lunchtime. Sector peers Antofagasta, Anglo American, Vedanta and Glencore Xstrata were also making gains, possibly as a result of rumours that China could unveil a stimulus package at some point this morning.
Even BHP Billiton was in demand despite the announcement that it could face enforcement action as part of the US regulatory probe linked in part to the hospitality it provided during its sponsorship of the Beijing Olympics in 2008. On a separate note, it was reported yesterday that a strike at BHP's Escondida project in Chile, the world's largest copper mine, came to an end.
Housing and construction stocks were also higher today, pulling back after bearing the brunt of the sell-off on Thursday. According to analysts at Spreadex, housing shares
fell yesterday after "economists warned that the Help-to-Buy scheme could stoke a new property boom as more buyers start chasing sales with opportunistic landlords fuelling the recent market rebound".
Persimmon, Travis Perkins, Bovis Homes and Balfour Beatty were recovering today, with the latter being helped higher by an upgrade by Liberum Capital to 'buy'.
Banking stocks were broadly lower with RBS a heavy faller after Investec downgraded the shares from 'hold' to 'sell', saying that the stock's valuation appears full. Standard Chartered and Lloyds were also down.
Similarly, insurance group Aviva was in the red after Exane BNP Paribas cut its rating for the stock from 'outperform' to 'neutral', saying it sees limited upside after a recent strong run.
Sector peer Prudential however edged higher after Nomura raised its target price and said it remains its top pick in the sector.
Wireless technology group Anite dropped sharply after saying that while full-year forecasts are unchanged, it has seen a slow start in the market for testing mobile handsets.
FTSE 100 - Risers
Fresnillo (FRES) 1,188.00p +5.60%
Randgold Resources Ltd. (RRS) 5,090.00p +4.09%
Persimmon (PSN) 1,138.00p +3.74%
Antofagasta (ANTO) 953.50p +2.53%
Anglo American (AAL) 1,531.50p +2.41%
Glencore Xstrata (GLEN) 306.60p +1.59%
Vedanta Resources (VED) 1,232.00p +1.48%
Travis Perkins (TPK) 1,575.00p +1.42%
Tullow Oil (TLW) 1,047.00p +1.36%
Eurasian Natural Resources Corp. (ENRC) 232.60p +1.09%
FTSE 100 - Fallers
Experian (EXPN) 1,183.00p -1.66%
Reckitt Benckiser Group (RB.) 4,431.00p -1.29%
Royal Bank of Scotland Group (RBS) 336.30p -1.26%
Standard Life (SL.) 345.30p -1.20%
ARM Holdings (ARM) 864.50p -1.14%
Babcock International Group (BAB) 1,142.00p -1.13%
Wood Group (John) (WG.) 882.00p -1.12%
Aviva (AV.) 399.80p -1.11%
William Hill (WMH) 421.90p -1.10%
International Consolidated Airlines Group SA (CDI) (IAG) 305.00p -1.01%
FTSE 250 - Risers
African Barrick Gold (ABG) 159.30p +7.64%
Polymetal International (POLY) 757.00p +5.36%
Kazakhmys (KAZ) 315.10p +5.24%
Balfour Beatty (BBY) 237.20p +4.96%
Bovis Homes Group (BVS) 758.00p +4.77%
Millennium & Copthorne Hotels (MLC) 560.50p +4.09%
AZ Electronic Materials SA (DI) (AZEM) 314.80p +3.72%
Berkeley Group Holdings (The) (BKG) 2,151.00p +3.12%
Bellway (BWY) 1,379.00p +3.06%
United Drug (UDG) 340.10p +3.06%
FTSE 250 - Fallers
Anite (AIE) 115.80p -7.88%
Keller Group (KLR) 935.00p -4.20%
JPMorgan Indian Inv Trust (JII) 314.00p -2.88%
Sports Direct International (SPD) 629.00p -2.78%
Ashtead Group (AHT) 611.50p -2.24%
Rightmove (RMV) 2,252.00p -2.00%
SIG (SHI) 174.70p -1.85%
Ophir Energy (OPHR) 326.30p -1.72%
Mitchells & Butlers (MAB) 398.80p -1.53%
IP Group (IPO) 135.50p -1.53%