Markets look to end the week on a quiet note with stocks lacking direction in the absence of the all-important US jobs report; the FTSE 100 fell slightly in the red on Friday morning.
Since the partial shutdown of the US government has extended into its fourth day, governmental agencies and departments will not be releasing economic data as scheduled, as politicians continue to wrangle over the budget and the crucial debt ceiling limit.
Market Analyst Craig Erlam from Alpari said that the announcement has been expected ever since the Democrats and Republicans failed to agree on a budget in time for Monday night's deadline. "Now that it has been confirmed, there's going to be very little else driving the markets on Friday, with no progress expected in negotiations on the budget and debt ceiling on Capitol Hill."
Markets are hoping that Congress will agree to raise the $16.7tn debt limit by the October 17th deadline to prevent the US government defaulting on its obligations, something that the Treasury Department said could have a "catastrophic effect" on all aspects of the US economy. It said in a report on Thursday that a default could lead to "events of the magnitude of late 2008 or worse".
House Speaker John Boehner reportedly said that he would not allow a default and would consider using a combination of Republican and Democratic votes to lift the debt ceiling if needed. According to an article in The New York Times, Boehner is willing to violate the so-called Hastert Rule which refers to "not bringing to the floor any measures that does not have a majority of Republican votes", the paper said.
FTSE 100: Miners provide a drag
Mining stocks were among the worst performers early on as risk appetite declined on the back of the continuing uncertainty in the US. Fresnillo, Randgold, Anglo American, Glencore Xstrata and BHP Billiton were all registering moderate losses early on.
Barclays was out of favour despite receiving a ratings upgrade by Investec from 'add' to 'buy'. The broker said it expects the third-quarter results later this month to be "lacklustre" but its upgrade is due to a combination of: the passing of the rights issue, valuation and dividend support; and the potential for "over-delivery" of cost-reduction targets.
Other financials however were performing relatively well this morning with insurers Standard Life, Prudential, Resolution and RSA edging higher, along with banking giant HSBC.
Sweeteners and food ingredients group Tate & Lyle was trading broadly flat after a mixed second- quarter update. The company said that adjusted operating profits in the second quarter were slightly below last year due to softness in the US beverage sector but it still maintained its guidance for "another year of profitable growth" in the 12 months to March 2014.
FTSE 250: Carpetright sinks on CEO exit, profit warning
Shares in carpet and curtains retailer Carpetright plunged this morning after announcing the departure of Chief Executive Darren Shapland as it warned falling sales meant full-year profits would be "significantly" below its previous expectations.
Carpetright reported that underlying sales in the UK were down 2.5% in the 10 weeks ending September 29th and had fallen 7.6% in the rest of Europe in local currency terms.
FTSE 100 - Risers
Standard Life (SL.) 353.20p +2.26%
Morrison (Wm) Supermarkets (MRW) 280.80p +1.70%
British American Tobacco (BATS) 3,212.50p +0.71%
Sainsbury (J) (SBRY) 390.70p +0.51%
Melrose Industries (MRO) 297.50p +0.47%
HSBC Holdings (HSBA) 672.60p +0.46%
Rolls-Royce Holdings (RR.) 1,110.00p +0.45%
SABMiller (SAB) 3,003.00p +0.42%
Reed Elsevier (REL) 828.50p +0.36%
RSA Insurance Group (RSA) 120.30p +0.33%
FTSE 100 - Fallers
Petrofac Ltd. (PFC) 1,374.00p -1.93%
Standard Chartered (STAN) 1,444.50p -1.43%
Randgold Resources Ltd. (RRS) 4,277.00p -1.29%
Fresnillo (FRES) 898.50p -1.26%
British Sky Broadcasting Group (BSY) 872.50p -1.02%
Wolseley (WOS) 3,165.00p -0.97%
BHP Billiton (BLT) 1,785.00p -0.94%
Smith & Nephew (SN.) 758.00p -0.92%
Glencore Xstrata (GLEN) 327.00p -0.91%
Aggreko (AGK) 1,466.00p -0.88%
FTSE 250 - Risers
Kenmare Resources (KMR) 29.24p +3.36%
Ted Baker (TED) 1,899.00p +2.59%
Eurasian Natural Resources Corporation (ENRC) 218.00p +2.49%
Home Retail Group (HOME) 171.20p +2.09%
Rathbone Brothers (RAT) 1,532.00p +1.79%
Dixons Retail (DXNS) 46.40p +1.64%
Regus (RGU) 193.80p +1.36%
Greggs (GRG) 421.70p +1.35%
Dignity (DTY) 1,418.00p +1.14%
Thomas Cook Group (TCG) 151.80p +1.13%
FTSE 250 - Fallers
Carpetright (CPR) 609.50p -9.50%
Computacenter (CCC) 521.50p -3.16%
Evraz (EVR) 121.90p -1.77%
PayPoint (PAY) 1,058.00p -1.76%
Polymetal International (POLY) 615.50p -1.68%
African Barrick Gold (ABG) 152.30p -1.36%
PZ Cussons (PZC) 404.70p -1.34%
Galliford Try (GFRD) 1,043.00p -1.32%
Mitchells & Butlers (MAB) 395.10p -1.25%
Savills (SVS) 612.00p -1.21%