- Miners, RBS drag markets lower
- US labour-market data in focus
- UK stocks follow sell-off on Wall Street
techMARK 2,747.58 -0.63%
FTSE 100 6,688.51 -0.62%
FTSE 250 15,393.35 -0.66%
Falling share prices
in the mining sector and a cool reaction to quarterly results from Royal Bank of Scotland ensured that UK stocks opened in negative territory on Friday morning, following on from a sell-off on Wall Street.
The FTSE 100 was lower for a third straight day, down 0.6% at 6,689 early on. The index has not closed below the 6,700 market since July 11th.
The Dow Jones Industrial Average sank 317 points, or 1.9%, on Thursday evening - its worst single-day decline since February - as investors fled for safety after a wave of corporate earnings, economic data and a debt default in Argentina.
Recent US figures - rising wage inflation and a sharp rebound in economic growth in particular - were causing traders to tread cautiously amid speculation that robust data could prompt the Federal Reserve to tighten policy sooner than expected after the end of quantitative easing.
As such, the US employment report will be the main event of the day on Friday. The consensus forecast is for a 231,000 gain in non-farm payrolls in July, down from an impressive 288,000 in June. The unemployment rate is expected to remain unchanged after falling to 6.1%, its lowest since September 2008.
"As always though, the devil is in the detail and it may be that revisions and/or wages growth take centre stage in terms of what is seen as influencing the Federal Reserve's timing on that all-important first interest rate hike," said Mike van Dulken, head of research at Accendo Markets.
Mining stocks and RBS provide a drag
Mining stocks were trading in the red early on with Glencore among the worst performers. The company announced this morning that it has completed the $7bn sale of its Las Bambas copper project in Peru, proceeds of which will be used to "immediately and materially de-gear [the] balance sheet".
Sector peers Rio Tinto, Randgold Resources, Anglo American and BHP Billiton were also out of favour.
RBS management to beat forecasts with a 367% increase in first-half operating profits to £2.6bn, but the market was left underwhelmed with the stock under pressure in morning trade. While impairment charges were sharply lower during the period - benefitting the bottom line - total income fell by 5.9% to £9.9bn.
British Airways and Iberia owner International Airlines Group was flying high as it moved into the black in the first half, said cost-cutting should help it boost annual profits and announced it was buying 16 Airbus jets.
Beverage can maker Rexam also advanced after saying it was on track after an in-line first half despite foreign exchange
(FX) and high aluminium prices impacting interim results.
FX rates also weighed on first-half profits at engineering group IMI, but shares
rose in early trading after the company said that organic revenues improved by 3%.
Outsourcing group Capita was a heavy faller after Credit Suisse downgraded the stock to 'neutral'.
FTSE 100 - Risers
International Consolidated Airlines Group SA (CDI) (IAG) 339.60p +2.66%
Rexam (REX) 513.00p +2.40%
Smith & Nephew (SN.) 1,044.00p +1.75%
Morrison (Wm) Supermarkets (MRW) 170.60p +1.19%
Admiral Group (ADM) 1,474.00p +1.17%
IMI (IMI) 1,429.00p +0.85%
British Sky Broadcasting Group (BSY) 885.00p +0.68%
Reckitt Benckiser Group (RB.) 5,280.00p +0.67%
Sainsbury (J) (SBRY) 314.70p +0.58%
Petrofac Ltd. (PFC) 1,101.00p +0.36%
FTSE 100 - Fallers
Capita (CPI) 1,173.00p -2.41%
United Utilities Group (UU.) 869.00p -2.36%
Schroders (SDR) 2,336.00p -2.26%
GKN (GKN) 335.50p -2.02%
Royal Bank of Scotland Group (RBS) 348.20p -2.00%
Glencore (GLEN) 352.95p -1.97%
Rio Tinto (RIO) 3,329.00p -1.86%
Mondi (MNDI) 1,024.00p -1.82%
BT Group (BT.A) 382.00p -1.67%
Randgold Resources Ltd. (RRS) 5,035.00p -1.66%
FTSE 250 - Risers
Direct Line Insurance Group (DLG) 294.80p +3.44%
Afren (AFR) 112.40p +2.18%
Bank of Georgia Holdings (BGEO) 2,468.00p +1.36%
PZ Cussons (PZC) 357.60p +1.19%
Tate & Lyle (TATE) 629.50p +0.88%
Informa (INF) 491.70p +0.78%
Pets at Home Group (PETS) 179.60p +0.73%
Just Eat (JE.) 202.90p +0.69%
SIG (SHI) 168.40p +0.60%
Premier Oil (PMO) 323.70p +0.59%
FTSE 250 - Fallers
Man Group (EMG) 113.30p -4.79%
Infinis Energy (INFI) 224.90p -3.27%
Hochschild Mining (HOC) 158.00p -3.07%
Fidessa Group (FDSA) 2,023.00p -2.97%
RPS Group (RPS) 248.50p -2.74%
Exova Group (EXO) 225.20p -2.51%
Ferrexpo (FXPO) 131.40p -2.38%
Merlin Entertainments (MERL) 346.10p -2.29%
Interserve (IRV) 622.00p -2.28%
Jupiter Fund Management (JUP) 374.10p -2.27%