RBS was trading as much as 12 per cent higher early on after surprising with a doubling of first-quarter pre-tax profits, helped by a reduction in costs and lower impairment charges.

However, London’s FTSE 100, which closed at a two-month high on Thursday, was lacking direction this morning as traders chose to sit on their hands ahead of the highly-anticipated US non-farm payrolls figure due out this afternoon.

The index was just 0.05 per cent higher at 6,813 after having finished at 6,808.87 yesterday evening, its highest close since 4 March.

All eyes will be on the US employment report due out at 13:30 with economists predicting a 215,000 rise in non-farm payrolls in April, up from 192,000 the month before. The unemployment rate is expected to dip to 6.6 per cent from 6.7 per cent.

However, some analysts believe that there could be an upside surprise in the data, as the US economy bounces back from the winter-induced weakness that has plagued recent economic indicators.

“A number of indicators has pointed to a solid rebound in activity in March and April (personal spending, ISM, industrial production) and this is expected to be reflected in payrolls as well,” said analysts at Danske Bank.

RBS jumps as profits rise

RBS pleased investors after saying that pre-tax profit surged to £1.64bn in the first three months of 2013, up from £826m the year before. This came despite a 2 per cent fall in income to £5.05bn, as expenses fell 6 per cent and impairment losses dropped 65 per cent.

“The first-quarter [statement] appears at first read to be way above consensus and our forecast,” said Analyst Mike Trippitt at Numis Securities.

A special dividend and a strong first-quarter performance were plated up for Intercontinental Hotel Group shareholders today, after it delivered its best ‘RevPAR’ performance in seven quarters. The stock jumped as much as 9 per cent this morning.

Beverage cans maker Rexam fell after saying that regional trading conditions were mixed in the first quarter. The company also announced that foreign exchange movements will be a headwind going forward, while metal premiums are at record highs.

Telecoms group TalkTalk was on the rise after Berenberg upgraded the stock to ‘hold’, while Taylor Wimpey and Redrow were benefiting from upgrades by Citigroup to ‘buy’.

FTSE 100 – Risers
Royal Bank of Scotland Group (RBS) 342.70p +11.77%
InterContinental Hotels Group (IHG) 2,196.00p +8.50%
Resolution Ltd. (RSL) 304.80p +2.42%
Barratt Developments (BDEV) 374.80p +1.74%
Persimmon (PSN) 1,343.00p +1.44%
ITV (ITV) 189.10p +1.34%
Randgold Resources Ltd. (RRS) 4,720.00p +0.90%
Group (VOD) 222.60p +0.88%
BG Group (BG.) 1,246.00p +0.69%
G4S (GFS) 238.70p +0.67%

FTSE 100 – Fallers
Associated British Foods (ABF) 2,953.00p -1.47%
Pearson (PSON) 1,086.00p -1.45%
British Sky Broadcasting Group (BSY) 887.50p -1.44%
Rexam (REX) 503.50p -1.27%
Hargreaves Lansdown (HL.) 1,200.00p -1.23%
Reckitt Benckiser Group (RB.) 4,842.00p -0.84%
Marks & Spencer Group (MKS) 440.50p -0.79%
Morrison (Wm) Supermarkets (MRW) 196.00p -0.76%
GKN (GKN) 384.10p -0.75%
Aberdeen Asset Management (ADN) 440.10p -0.74%

Source: ShareCast