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05 Mar 2021 | 10:59

London midday: FTSE turns higher as banks, energy shares rally; payrolls eyed

(Sharecast News) - London stocks had reversed earlier losses to trade a touch higher by midday, helped along by strength in the banking and energy sectors, as investors eyed the latest US non-farm payrolls report. The FTSE 100 was up 0.2% at 6,665.64, having kicked the session off in the red amid concerns about inflation.

Richard Hunter, head of markets at Interactive Investor, said: "Inflation concerns and a continued rotation out of growth stocks is beginning to weigh on equity markets.

"The Federal Reserve's insistence that it believes these inflation moves are transitory was not enough to arrest a further spike in bond yields, as investors fretted that there were no plans to control the longer end of the yield curve. At the same time, the perceived threat of higher interest rates arriving earlier than expected washed through to the shares which could be most obviously affected by the resultant slowing of profits."

However, the top-flight index was able to pop higher by midday. IG said the value composition of UK markets helped to alleviate some selling pressure, with pro-cyclical sectors such as banks and energy on the rise.

"Rising yields provide an alternative for equities, with portfolio managers provided an alternate asset to allocate funds into as a means of hedging volatility. However, rising yields also heighten the cost of borrowing for businesses, tightening conditions for those same firms hoping to make up lost ground when the reopening starts," said market analyst Joshua Mahony.

Later in the day, all eyes will be on the payrolls report, which is due out at 1330 GMT, along with the unemployment rate and average earnings.

In equity markets, banks were the top performers, with Standard Chartered, HSBC, NatWest and Barclays all higher.

Oil giants BP and Shell also gushed higher amid rising oil prices.

Spirent Communications surged after the technology company said it had bought US peer octoScope for $55m in cash.

ConvaTec gained as it posted a rise in full-year revenue but a dip in earnings after the pandemic created "both challenges and opportunities" for the medical products and technology company in 2020.

Aggreko was in the black after agreeing to be bought by private equity firms TDR Capital and I Square Capital Advisors in a deal valuing the FTSE 250 company at £2.3bn.

On the downside, London Stock Exchange shares slid even after it posted higher full-year profit and sales driven by a stronger-than-expected showing in both its Post Trade units and Information units despite the "unparalleled" environment.

Market Movers

FTSE 100 (UKX) 6,665.64 0.22% FTSE 250 (MCX) 21,239.27 -0.27% techMARK (TASX) 4,058.03 -0.24%

FTSE 100 - Risers

Standard Chartered (STAN) 498.90p 4.53% Sainsbury (J) (SBRY) 229.30p 2.87% HSBC Holdings (HSBA) 438.70p 2.86% Anglo American (AAL) 2,968.50p 2.82% BP (BP.) 321.25p 2.60% BT Group (BT.A) 138.15p 2.49% NATWEST GROUP PLC ORD 100P (NWG) 191.00p 2.39% Barclays (BARC) 170.18p 2.11% B&M European Value Retail S.A. (DI) (BME) 543.40p 1.95% Royal Dutch Shell 'A' (RDSA) 1,550.60p 1.83%

FTSE 100 - Fallers

London Stock Exchange Group (LSEG) 8,656.00p -8.77% Scottish Mortgage Inv Trust (SMT) 1,040.00p -4.41% Admiral Group (ADM) 2,973.00p -2.94% Melrose Industries (MRO) 178.45p -2.75% Pershing Square Holdings Ltd NPV (PSH) 2,480.00p -2.17% BAE Systems (BA.) 487.40p -2.01% International Consolidated Airlines Group SA (CDI) (IAG) 212.10p -1.90% Just Eat Takeaway.Com N.V. (CDI) (JET) 6,440.00p -1.86% CRH (CRH) 3,316.00p -1.54% Taylor Wimpey (TW.) 170.00p -1.45%

FTSE 250 - Risers

Spirent Communications (SPT) 245.50p 7.44% Hammerson (HMSO) 33.95p 5.57% Wood Group (John) (WG.) 324.70p 4.64% Cairn Energy (CNE) 207.40p 3.70% FirstGroup (FGP) 93.20p 3.56% Petrofac Ltd. (PFC) 135.90p 3.54% Convatec Group (CTEC) 195.30p 3.44% Energean (ENOG) 934.60p 3.20% Mitchells & Butlers (MAB) 308.50p 3.01% Ferrexpo (FXPO) 338.20p 2.73%

FTSE 250 - Fallers

Baillie Gifford US Growth Trust (USA) 287.00p -8.01% Allianz Technology Trust (ATT) 2,620.00p -5.76% Edinburgh Worldwide Inv Trust (EWI) 328.50p -4.64% The Renewables Infrastructure Group Limited (TRIG) 125.40p -3.83% John Laing Group (JLG) 307.00p -3.52% Carnival (CCL) 1,682.00p -2.86% Henderson Smaller Companies Inv Trust (HSL) 1,108.00p -2.81% Ascential (ASCL) 369.80p -2.74% Cineworld Group (CINE) 109.65p -2.53% GCP Student Living (DIGS) 149.40p -2.48%
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