London close: Stocks fall as investors mull UK jobs, US inflation data

London stocks ended down on Tuesday, led lower by weakness in the mining sector as investors mulled the latest UK jobs and US inflation data.
The FTSE 100 closed 0.5% lower at 7,034.06.

Joshua Mahony, senior market analyst at IG, said: “Global stocks have failed to maintain their inflation-fuelled gains, with the DAX providing the only area of strength as UK and US indices lose ground. The release of US inflation data provided some respite for the Federal Reserve today, with monthly inflation falling to the joint lowest level this year. The big question today is whether the decline in both core and headline inflation marks the beginning of the end for ‘transitory’ above-target pricing as alluded to by the Fed. The sky-high PPI figures do continue to highlight underlying inflation across factory inputs, yet we are starting to see the impact lessen for consumers.

“The prospect of lower inflation pressures has sparked a fresh move lower for commodity prices today. Sharp declines across the likes of palladium, iron ore, platinum, and copper have sent miners lower, to the detriment of UK markets in particular. Bulls will hope that Joe Biden’s plan to ramp up infrastructure spending will help drive asset prices upwards once again. However, with Chinese growth slowing, we are starting to see some of the upside throughout the sector ease somewhat.”

On home shores, meanwhile, figures released earlier by the Office for National Statistics showed that worker numbers bounced back in August to pre-pandemic levels, while job vacancies hit a record high as the recovery from the Covid-19 crisis continues.

The number of workers on payrolls increased by 241,000 from August to 29.1m, while the number of job vacancies in the June to August period rose 35% to a new record high of 1.03m, with the biggest jump in hiring seen in hotels and restaurants.

The unemployment rate fell to 4.6% in July from 4.7% the month before, in line with analysts’ expectations.

In equity markets, miners were under pressure as metals prices fell, with BHP, Antofagasta and Anglo American all lower. Mining giant BHP was also hit by a downgrade to ‘equalweight’ at Barclays. Russian steelmaker Evraz was under the cosh also.

British Airways and Iberia parent IAG flew lower after a downgrade to ‘neutral’ from ‘outperform’ at BNP Paribas.

Ocado lost ground the online supermarket said sales at Ocado Retail dropped by considerably more than expected over its third quarter, but only due to a conflagration at its customer fulfilment centre at Erith.

On the upside, JD Sports Fashion surged to the top of the FTSE 100 after it reported record first-half results, boosted by pent-up demand after UK stores reopened from lockdown and acquisitions in the US.

SSE was trading up following a report that activist hedge fund Elliott Investment Management is agitating to break up the energy firm.

888 rallied, with traders pointing to a Berenberg note from Monday, in which the bank hiked its price target to 600p from 470p and “strongly reiterated” its ‘buy’ recommendation.

Market Movers

FTSE 100 (UKX) 7,034.06 -0.49%
FTSE 250 (MCX) 23,687.26 -0.37%
techMARK (TASX) 4,665.71 -0.29%

FTSE 100 – Risers

JD Sports Fashion (JD.) 1,158.50p 10.44%
SSE (SSE) 1,663.00p 1.93%
Entain (ENT) 1,941.50p 1.92%
Bunzl (BNZL) 2,614.00p 1.83%
B&M European Value Retail S.A. (DI) (BME) 588.40p 1.66%
Reckitt Benckiser Group (RKT) 5,821.00p 1.59%
Next (NXT) 7,970.00p 1.50%
Kingfisher (KGF) 360.60p 1.43%
Severn Trent (SVT) 2,839.00p 1.07%
Flutter Entertainment (CDI) (FLTR) 14,575.00p 0.97%

FTSE 100 – Fallers

Evraz (EVR) 585.80p -4.12%
International Consolidated Airlines Group SA (CDI) (IAG) 142.42p -3.96%
Johnson Matthey (JMAT) 2,763.00p -3.26%
Anglo American (AAL) 2,994.50p -3.18%
BT Group (BT.A) 155.55p -2.63%
BHP Group (BHP) 2,026.00p -2.62%
Rolls-Royce Holdings (RR.) 109.36p -2.30%
Intermediate Capital Group (ICP) 2,186.00p -2.19%
Antofagasta (ANTO) 1,427.50p -2.13%
Standard Chartered (STAN) 440.10p -2.11%

FTSE 250 – Risers

888 Holdings (888) 413.40p 5.03%
WH Smith (SMWH) 1,631.00p 4.25%
Tullow Oil (TLW) 44.95p 3.05%
Mediclinic International (MDC) 322.60p 3.00%
Cineworld Group (CINE) 65.00p 2.75%
Rank Group (RNK) 173.20p 2.49%
Drax Group (DRX) 435.00p 2.35%
Contour Global (GLO) 194.60p 1.99%
Rotork (ROR) 361.60p 1.97%
Softcat (SCT) 2,212.00p 1.65%

FTSE 250 – Fallers

Ferrexpo (FXPO) 345.60p -8.91%
Cairn Energy (CNE) 180.80p -4.29%
Paragon Banking Group (PAG) 545.00p -4.22%
NCC Group (NCC) 301.50p -3.83%
Wood Group (John) (WG.) 224.10p -3.07%
Chemring Group (CHG) 320.00p -2.88%
FirstGroup (FGP) 86.95p -2.63%
Fidelity China Special Situations (FCSS) 343.00p -2.56%
BlackRock World Mining Trust (BRWM) 535.00p -2.55%
easyJet (EZJ) 575.20p -2.51%

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