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9.30am: London slides after early rise

London’s blue chips fell back after an initial rise and the FTSE 100 closed 57.3 points lower at 7,318.04.

Technology shares were in focus after the smaller-than-expected rise in US inflation sparked hopes that interest rates could be smaller going forward.

Trustpilot investor Molten Ventures surged 12% and Auction Technology Group jumped 13%.

The sentiment spilled over into the consumer sector with ASOS and Currys both soaring.

Stock markets also received an early boost from news that China was easing Covid restrictions, which included shortening quarantines by two days for close contacts of infected people and for inbound travellers and removing a penalty for airlines for bringing in too many cases.

Stocks to benefit included Asia-focused Prudential which topped this morning’s FTSE 100 risers, up 7.2%, while mining companies also advanced. Anglo American was up 5.1% and Rio Tinto rose 3.7%.

7am: Galliford Try

Construction group Galliford Try said its operations are performing well and it is trading in line with expectations against a backdrop of unsettled wider market conditions.

In a statement ahead of its annual general meeting the company said it was confident of meeting its objectives for the current financial year and making good progress on its sustainable growth strategy.

7am: Heathrow on track

Heathrow Airport said it is on track for headcount to return to pre-pandemic levels as passenger numbers hit a European high.

It handled 5.9m passengers in October, 84% of 2019 levels. Year to date it has served 50m passengers, 74% of 2019 levels.

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7am: Economy shrinks

The UK economy shrank by 0.2% between July and September driven largely by falls in manufacturing.

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7am: FRP Advisory

Business advisory firm FRP Advisory said administrations remain below pre-pandemic levels despite pressures facing businesses.

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Global markets

London was expected to extend Thursday’s late rally after US inflation figures came in lower than expectations, raising hopes that the Federal Reserve may ease the pace of its interest rate hikes.

The FTSE 100 index closed 79.09 points (1.1%) higher at 7,375.34 and Wall Street responded with strong gains.

The tech-heavy Nasdaq Composite index notched its largest-ever daily points rise, up 7.4%. The Dow Jones Industrial Average added 3.7%, while the S&P 500 jumped 5.5%.

Stocks in Asia also surged this morning. The Shanghai Composite in China was 1.7% higher and the Hang Seng in Hong Kong jumped 7%. In Tokyo, the Nikkei 225 rose 3%.