Markets opened with small gains on Tuesday morning with stocks pausing for breath after a strong rise the day before.
Stocks surged on Monday as traders took advantage of low volumes - with Wall Street closed for Labour Day - to push the London index up 1.5%. Better-than-expected manufacturing data from the UK, Eurozone and China and delays to possible US military action against Syria helped push stocks higher yesterday.
However with US markets re-opening today the mood in Europe is expected to be a touch less bullish with gains likely to be limited.
"With a number of key central bank meetings to come over the next couple of days, as well as a huge US jobs report on Friday, investors are understandably cautious as we head towards the end of the week," said Market Analyst Craig Erlam from Alpari.
Investors will be particularly nervous about the employment report given that it comes less than two weeks before the Federal Reserve's next policy meeting at which analysts now widely expect the central bank to begin tapering its asset-purchase programme.
"While the Fed isn't going to draw a conclusion on the state of the economy on that one release, it is the most current data available and could therefore prove decisive, given that the Fed until this point has been split on which move to start tapering," Erlam said.
FTSE 100: Vodafone pulls back after agreeing on VZW disposal
Vodafone will be in focus today after late last night reaching an agreement to sell its 45% stake in US outfit Verizon Wireless to Verizon Communications in a transaction valued at $130bn (£84bn) in cash and shares. Shareholders are expected to receive 71% of the net proceeds of the disposal. The stock was a heavy faller this morning, pulling back after a strong rise over the last few days.
Real estate groups were under pressure this morning after Deutsche Bank downgraded stocks and target prices across the sector. Land Securities and British Land were among the worst performers after the bank cut its ratings for both to 'hold'. Hammerson, whose rating was kept at 'hold', was out of favour after having its target price cut.
Security solutions firm G4S was also lower after Credit Suisse lowered its recommendation from 'outperform' to 'neutral', saying that the stock has re-rated and is now trading at a premium to its historic average.
Leading the upside was Primark owner and food ingredients group AB Foods after Exane BNP Paribas raised the stock to 'outperform'.
Mining group Rio Tinto was extending gains this morning after yesterday reporting the first shipment of iron ore from its expanded operations in Western Australia. "We are attracted by Rio's value, quality volume growth and cost cutting potential," said analysts at UBS this morning.
FTSE 250: Genus drops after full-year results
Genus fell sharply this morning despite increasing its annual dividend by 10%and saying it expected revenue growth to improve as it reported a rise in underlying profits. The animal genetics company's adjusted pre-tax profit rose 2% to £47.2m in the year ended June 30th even as feed costs increased. Statutory profit before tax however fell 30% to £38.1m because of a fall in the value of biological assets under accounting rules.
Spirent Communications rose after saying its Chief Executive Officer Bill Burns will step down from the company with immediate effect. Chief Financial Officer Eric Hutchinson will replace Burns in the interim while the technology firm searches for a successor.
FTSE 100 - Risers
Associated British Foods (ABF) 1,920.00p +2.24%
BT Group (BT.A) 344.70p +1.92%
easyJet (EZJ) 1,308.00p +1.87%
Centrica (CNA) 394.90p +1.54%
Tullow Oil (TLW) 1,033.00p +1.47%
Shire Plc (SHP) 2,427.00p +1.21%
Antofagasta (ANTO) 895.50p +1.13%
Experian (EXPN) 1,152.00p +1.05%
Rexam (REX) 502.00p +1.05%
HSBC Holdings (HSBA) 694.30p +1.05%
FTSE 100 - Fallers
Land Securities Group (LAND) 893.00p -1.71%
Vodafone Group (VOD) 210.15p -1.43%
British Land Co (BLND) 559.50p -1.32%
Carnival (CCL) 2,397.00p -1.07%
Fresnillo (FRES) 1,265.00p -0.78%
Pearson (PSON) 1,290.00p -0.69%
Petrofac Ltd. (PFC) 1,401.00p -0.64%
Prudential (PRU) 1,109.00p -0.63%
G4S (GFS) 259.80p -0.42%
AstraZeneca (AZN) 3,169.50p -0.41%
FTSE 250 - Risers
Domino Printing Sciences (DNO) 710.50p +3.65%
TalkTalk Telecom Group (TALK) 256.00p +3.23%
Spirent Communications (SPT) 132.20p +2.80%
F&C Asset Management (FCAM) 98.15p +2.67%
Rank Group (RNK) 160.90p +2.48%
Carpetright (CPR) 663.00p +2.47%
Pace (PIC) 298.00p +2.23%
International Personal Finance (IPF) 624.00p +1.79%
Edinburgh Dragon Trust (EFM) 262.60p +1.78%
Hays (HAS) 106.30p +1.72%
FTSE 250 - Fallers
Genus (GNS) 1,350.00p -8.72%
JPMorgan Indian Inv Trust (JII) 290.50p -3.17%
Great Portland Estates (GPOR) 529.00p -2.85%
Capital & Counties Properties (CAPC) 317.40p -2.34%
Smith (DS) (SMDS) 264.10p -2.19%
Derwent London (DLN) 2,338.00p -1.81%
Shaftesbury (SHB) 595.50p -1.16%
Rathbone Brothers (RAT) 1,597.00p -1.11%
Debenhams (DEB) 107.40p -1.01%
Fidessa Group (FDSA) 2,127.00p -0.98%