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FTSE up for sixth day, U.S. payrolls in focus

Published 09/03/2010, 04:27 AM
Updated 09/03/2010, 04:32 AM

* FTSE 100 up 0.3 percent, on track for sixth day of gains

* Energy, mining stocks, Vodafone major supports

* U.S. payrolls in focus

By Simon Falush

LONDON, Sept 3 (Reuters) - Slim gains from miners and energy firms nudged Britain's top share index slightly higher on Friday, but moves were muted ahead of closely watched August employment data from the United States.

By 0810 GMT the FTSE 100 was up 14.63 points or 0.3 percent at 5385.67, its sixth day of gains after it closed 0.1 percent up on Thursday. The index is up 3.4 percent this week, its strongest showing since early July.

Fears about the state of the global recovery have eased somewhat this week on surprisingly strong manufacturing data from the United States while economic figures from China and Australia also improved confidence.

Non-farm payrolls, due at 1230 GMT, are forecast to have fallen 100,000 after declining 131,000 in July, according to a Reuters survey.

"Everyone's holding their breath before payrolls," said Richard Hunter, head of equities at Hargreaves Lansdown.

"The fact remains that sentiment remains very fragile, and we'll need a sustained set of positive news before that changes."

COMMODITY LIFT

Commodity stocks were the main support for the index, as fears about the demand outlook remained relatively subdued.

Energy giant BP rose 0.6 percent after it said it was a fortnight away from sealing the well which caused the massive oil spill in the Gulf of Mexico.

Mining groups Rio Tinto and Xstrata added 0.6 and 0.7 percent respectively.

Autonomy was the top gainer, up 2.6 percent, adding to gains the previous session. Lingering M&A speculation has focused on Microsoft and Oracle.

Vodafone also provided support for the index, up 2.3 percent, lifted by a price target hike from Deutsche Bank, which has a "buy" rating.

Stock moves around the world were very limited. The MSCI Asian stock index outside Japan added 0.2 percent. In Japan, stocks rose 0.3 percent, with exporters among the best performers.

Some analysts say that given the gains in markets this week, unless payrolls surprise to the upside, the number could be used as an excuse to book profits.

"Just by the look of trade throughout Asia, my feeling is that risk is probably coming out of the markets heading into tonight," said Ben Potter, market strategist at IG Index in Melbourne.

"People don't seem to want to carry a strong week's work over the weekend."

Investors will watch UK CIPS PMI services data for August at 0828 GMT for a steer on the British economy. It is expected to come in at 52.9, down from 53.10 the previous month.

In the absence of much corporate news, some investors are looking closely at technical levels.

"Despite the narrow range of the Thursday trading session, the FTSE's low at 5346 confirmed the support of the 200 period simple moving average at 5342," said Raghee Horner, Autochartist Chief Market Analyst.

"The short-bodied candle on the daily chart, however, shows that the September 2 session was a day of pause but not necessarily any sharp profit taking from the sharp move higher that preceded it."

Home Retail was the top faller, down 1 percent, as the owner of catalogues-based stores is likely to drop out of the FTSE 100, meaning that many tracker funds would be forced to sell the stock. (Editing by Michael Shields)

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