London stocks rose in early trade on Friday, with miners powering ahead after Glencore and Rio Tinto confirmed merger talks, and as investors eyed the release of the latest US non-farm payrolls report.
At 0830 GMT, the FTSE 100 was up 0.3% at 10,071.15.

The payrolls report for December is due at 1330 GMT, along with the unemployment rate and average earnings.

Kathleen Brooks, research director at XTB, said: "The US labour market report for December is a high stakes release that has the potential to trigger significant volatility as it will tell us whether the 75bps of US rate cuts since September was the right call from the government.

"Economists surveyed by Bloomberg are expecting a reading of 70k, which is below the long run trend of 100k per month for US job creation, but is higher than the 64k November print. This data could still be impacted by the fallout from last year's federal government shutdown. We will be watching out for revisions to the November data and to see whether the unemployment rate does fall to 4.5% as expected, as furloughed workers return to their government jobs in the final weeks of the year."

Brooks said earnings growth is expected to edge up slightly to 3.6% from 3.5%, and the participation rate could fall slightly to 62.4% from 62.5% in November.

"Overall, a hawkish surprise and a reading above 85k would suggest that the US labour market is resilient and may not have needed the 75bps of Fed rate cuts last year. This could lead to a recalibration lower in interest rate expectations, currently the Fed Fund Futures market is pricing in two rate cuts for next year," Brooks said.

"The 'good news is bad news' theme could also hit stock markets and lead to some risk aversion. Stocks could initially come under pressure if we get too good a number for payrolls, and this may hit interest rate-sensitive sectors like tech at the end of the week."

On home shores, investors were mulling the latest data from the British Retail Consortium. It showed that that footfall across all shopping locations dropped in December, marking a disappointing end to the year for retailers, who are having to contend with weak consumer sentiment amid the rising cost of living.

In equity markets, heavily-weighted miners rallied after Glencore and Rio Tinto confirmed they are in preliminary talks about a possible combination of some or all of their businesses, which could include an all-share merger.

Responding to press speculation, Glencore said there is no certainty that the terms of any transaction or offer will be agreed, nor as to the terms or structure of any such transaction or offer, if agreed.

Under UK takeover rules, Rio has until 1700 GMT on 5 February to either announce a firm intention to make an offer or walk away.

Glencore surged 8% to the top of the FTSE 100 index, but Rio was down just over 2%. In 2014, Rio rejected a merger approach from Glencore.

Derren Nathan, head of equity research at Hargreaves Lansdown, said: "Last year's theme of consolidation in the natural resources sector has shown no sign of let up in the early part of 2026. In the same week we've seen Chevron make a swoop for Lukoil's non-Russian fossil fuel assets, Rio Tinto and Glencore have confirmed that the mother of all mining deals could be back on the table.

"Details are thin on the ground, but a deal could see Rio scoop up some or all of Glencore's assets. A full combination would create a global leader in multiple industrial metals including iron ore and transition metals such as copper, cobalt and lithium.

"But M&A isn't an automatic path to extracting value for investors, with Rio's Australian shares down 6% and Glencore ending Thursday in negative territory.

"The diverse asset base and likely synergies have the potential to provide further protection against commodity price fluctuations, but just how Glencore's coal and trading arms fit in with Rio's business model, and push for improved sustainability credentials, are key questions to answer."

Elsewhere, Marks & Spencer was boosted by an upgrade to 'buy' from 'hold' at Berenberg, while shipping services provider Clarksons shot higher on the back of an improved outlook for 2025 profit.

Safety equipment maker Halma rose after saying it had bought Italian firm Safetec for €72.5m (£63m), on a cash- and debt-free basis, to be funded from Halma's existing facilities.

Sainsbury's slumped despite saying it remained on track to deliver annual retail profits of more than £1bn, following strong demand for food and drink in the run up to Christmas.

IAG flew lower after saying it had appointed Joe Antonio Barrionuevo, the finance chief of British Airways, as its new chief financial officer, succeeding Nicholas Cadbury.

Market Movers

FTSE 100 (UKX) 10,071.15 0.26%
FTSE 250 (MCX) 22,924.13 0.14%
techMARK (TASX) 5,853.39 0.04%

FTSE 100 - Risers

Glencore (GLEN) 446.15p 8.03%
Antofagasta (ANTO) 3,435.00p 2.97%
Anglo American (AAL) 3,220.00p 2.81%
Marks & Spencer Group (MKS) 351.20p 1.86%
Burberry Group (BRBY) 1,359.50p 1.84%
Flutter Entertainment (DI) (FLTR) 16,245.00p 1.82%
Shell (SHEL) 2,607.50p 1.78%
BP (BP.) 422.90p 1.74%
Rolls-Royce Holdings (RR.) 1,290.00p 1.38%
Ashtead Group (AHT) 5,556.00p 1.31%

FTSE 100 - Fallers

Sainsbury (J) (SBRY) 316.00p -3.95%
Tesco (TSCO) 412.90p -2.18%
Rio Tinto (RIO) 6,060.00p -2.16%
Aviva (AV.) 680.40p -1.48%
Beazley (BEZ) 813.00p -1.16%
Severn Trent (SVT) 2,864.00p -0.90%
International Consolidated Airlines Group SA (CDI) (IAG) 432.00p -0.89%
United Utilities Group (UU.) 1,226.00p -0.85%
Berkeley Group Holdings (The) (BKG) 3,988.00p -0.85%
AstraZeneca (AZN) 14,060.00p -0.82%

FTSE 250 - Risers

Herald Investment Trust (HRI) 2,625.00p 6.71%
Clarkson (CKN) 4,200.00p 5.40%
Diversified Energy Company (DI) (DEC) 1,060.00p 3.52%
Ceres Power Holdings (CWR) 255.60p 2.98%
4Imprint Group (FOUR) 4,090.00p 2.89%
Harbour Energy (HBR) 191.00p 2.69%
Me Group International (MEGP) 151.80p 2.57%
Dr. Martens (DOCS) 80.00p 2.56%
Ithaca Energy (ITH) 156.80p 1.95%
Raspberry PI Holdings (RPI) 290.20p 1.90%

FTSE 250 - Fallers

Avon Technologies (AVON) 1,792.00p -4.48%
Discoverie Group (DSCV) 580.00p -3.49%
W.A.G Payment Solutions (EWG) 126.00p -2.70%
THG (THG) 46.30p -2.36%
Endeavour Mining (EDV) 4,004.00p -2.29%
TR Property Inv Trust (TRY) 323.00p -1.82%
Senior (SNR) 217.50p -1.81%
Big Yellow Group (BYG) 1,042.00p -1.51%
Bakkavor Group (BAKK) 230.00p -1.50%
Playtech (PTEC) 265.50p -1.48%