London midday: FTSE little changed as investors digest US rate expectations

9th Nov 2015 11:50

(ShareCast News) - Housebuilders were the standout losers on the FTSE 100 after after Friday´s much stronger-than-expected US jobs report for October stoked speculation of rising interest rates worldwide.At midday, the FTSE 100 was off by just 0.69 points or 0.01% to 6,353.11.The latest US non-farm payrolls report on Friday saw Fed funds futures move to price in about a 70% chance of a first Fed rate hike in December.The prospect of rising rates Stateside should not worry investors. Quite the opposite, it shows improved sentiment is sustainable, analysts at JP Morgan said."We maintain the stance that the potential start of Fed hikes should not be a cause for renewed concern. In fact, it should be seen as a confirmation that improved sentiment is sustainable."Citigroup´s US economic surprise index (CESI) is close to breaking above zero, for the first time this year, and historically this pointed to market gains ahead. In addition, market internals could be helped, US Banks show a positive correlation with the bond yields," JP Morgan´s Mislav Matejka said in a research note sent to clients.As regards the BoE specifically, Citi said on Monday the BoE´s rate decisions tend to fall somewhere in between the US and the Eurozone."The UK probably faces a longer period of low-flation than the US, while the BoE faces less pressure than the US Fed to hike rates on macro-prudential grounds," the American broker said.Meanwhile, investors seemed to be brushing off news that China's exports fell 6.9% year-on-year in October while imports dropped by another 18.8%. Economists had penciled in year-on-year declines of 3.2% and 15%, respectively.According to Deutsche Bank´s Jim Reid, news out on Friday - after the close of markets in Shanghai - that the country´s securities regulator was set to end its five-month freeze on IPOs may have contributed to the better tone in the market.On the flip-side however, he said the announcement appeared to spark some concern regarding possible capital outflows, pushing 10-year yields 10 basis points higher to 3.25% - the biggest rise since 5 December last year.Speaking over the weekend, San Francisco Federal Reserve president John Williams said "it makes sense to gradually remove the policy of accommodation that helped get the economy to where we are," adding he would wait to see the data published before the next FOMC meeting before making up his mind regarding his vote.That helped to balance out more hawkish comments from his peers at the Chicago and St.Louis Fed on Friday.The US Federal Reserve´s Labor Market Composite Index for October is set for release in the afternoon.Tullow Oil lights a fire under oil explorersShares in oil exploration and production company Tullow Oil surged on Monday after Copenhagen-based A.P. Moeller-Maersk A/S agreed to buy half of Africa Oil Corp.'s shares in licenses in Kenya and Ethiopia, where Tullow operates some blocks. "The news for Tullow is very positive and has brought buyers back today," said Atif Latif, director of trading at Guardian Stockbrokers, adding that it gives more potential upside to Tullow's assets in the region.InterContinental Hotels responded to recent market speculation saying it is not considering a potential sale or merger of the company. On Friday, shares in the company surged following a report it was mulling the possibility of a sale or merger. Bloomberg cited people familiar with the matter as saying that IHG is in discussions with financial advisers about whether to sell itself or merge with a competitor as the sector consolidates.Singapore Airlines will deploy Inmarsat's GX Aviation service on its long-haul fleet starting next year. GX Aviation delivers high-speed broadband over its Global Xpress satellite network. It will first be installed on the airline's Boeing B777-300ER aircraft in the second half of 2016, followed by its Airbus A380-800s and A350-900s. It is the second major airline the company has signed a deal with in the last month, after securing a 10-year contract with Lufthansa in October to provide the service.National Grid has filed a request with the Massachusetts Department of Public Utilities to update its electricity distribution rates. The company said it was the first time since it has filed such a request, which will impact all electricity companies operating in the state if it is approved. National Grid is requesting an increase of around $143m (£95m) a year in electricity delivery revenue to cover increased operating costs and investments made in its electric delivery network.Aggreko maintained its full year-profit expectations despite a challenging market backdrop, as it reported a fall in third quarter sales. In a trading update for 1 July to 8 November, the temporary power provider said underlying revenue for the period was 7% behind last year, with reported revenue down 6%. This was partly a result of the continuing weak economic backdrop in Brazil.Bank of Georgia said the initial public offering of shares in its Georgia Healthcare Group (GHG) unit would be priced at 170p each, valuing the company at £218m ($328.7m). The IPO is 38.7m shares to raise £66m ($100m) which will be used to renovate and develop the recently acquired Deka and Sunstone referral hospitals in Tbilisi, adding approximately 500 beds to existing hospital capacity, the company said.Lonmin announced it would carry out a £271m ($407m) rights-issue.Stock in TalkTalk was lower on the back of a report in the Daily Telegraph that the company might scrap its dividend as its finances come under intense pressure in the wake of its "crippling cyber attack". A downgrade by HSBC also weighed on the shares.Market MoversFTSE 100 (UKX) 6,358.00 0.07%FTSE 250 (MCX) 17,202.87 0.22%techMARK (TASX) 3,088.23 -0.31%FTSE 100 - RisersAberdeen Asset Management (ADN) 359.30p 3.37%Anglo American (AAL) 540.00p 2.78%Rio Tinto (RIO) 2,335.00p 2.32%Standard Chartered (STAN) 628.10p 2.18%Ashtead Group (AHT) 1,038.00p 2.06%Barclays (BARC) 236.95p 1.96%Smiths Group (SMIN) 1,019.00p 1.95%Glencore (GLEN) 117.95p 1.81%HSBC Holdings (HSBA) 536.10p 1.57%Antofagasta (ANTO) 522.00p 1.46%FTSE 100 - FallersInterContinental Hotels Group (IHG) 2,665.00p -3.93%Taylor Wimpey (TW.) 175.90p -3.09%Persimmon (PSN) 1,825.00p -2.93%Intu Properties (INTU) 328.20p -2.61%Severn Trent (SVT) 2,131.00p -2.47%Barratt Developments (BDEV) 564.00p -2.34%Centrica (CNA) 219.60p -2.27%United Utilities Group (UU.) 938.00p -2.04%Berkeley Group Holdings (The) (BKG) 3,052.00p -1.83%Hammerson (HMSO) 606.00p -1.54%FTSE 250 - RisersTullow Oil (TLW) 259.40p 18.88%Premier Oil (PMO) 84.80p 13.29%Hunting (HTG) 371.80p 7.99%Serco Group (SRP) 107.10p 7.80%Aggreko (AGK) 1,002.00p 7.51%Kaz Minerals (KAZ) 105.70p 5.38%Ophir Energy (OPHR) 103.40p 5.19%Weir Group (WEIR) 1,189.00p 4.94%Amec Foster Wheeler (AMFW) 547.00p 4.29%Wood Group (John) (WG.) 597.00p 3.92%FTSE 250 - FallersTalkTalk Telecom Group (TALK) 214.10p -5.31%Bellway (BWY) 2,411.00p -3.29%Grainger (GRI) 237.00p -2.55%Allied Minds (ALM) 475.90p -2.26%Supergroup (SGP) 1,637.00p -2.21%Daejan Holdings (DJAN) 6,050.00p -2.10%Capital & Counties Properties (CAPC) 419.00p -2.01%Shaftesbury (SHB) 904.50p -2.00%Dairy Crest Group (DCG) 607.00p -1.86%Britvic (BVIC) 690.00p -1.85%