London stocks closed in negative territory on Tuesday amid worries about inflation and Chinese property group Evergrande, after investors had the day to mull the latest UK jobs data.
The FTSE 100 ended the session down 0.23% at 7,130.23, and the FTSE 250 was 0.08% weaker at 22,468.90.
Sterling was in a mixed state, last trading 0.01% weaker against the dollar at $1.3593, while it strengthened 0.14% on the euro to 1.1783.
“Risk-off sentiment has pushed European and US markets lower today, with resurgent fears over rampant inflation and Chinese risks coming back into play,” said IG senior market analyst Joshua Mahony.
“Evergrande may have helped ease fears with recent sales, yet the failure to pay a third round of bond payments in as many weeks provides a reminder that all is not well.
“The IMF has provided a less than encouraging assessment of the global economic outlook, with downgrades to growth forecasts coming as they warned of overvalued markets and increased risks within emerging markets.”
Mahony said easy lending conditions had brought higher valuations, which the IMF saw as a major risk as the world moved towards an inflation-fuelled phase of monetary tightening.
Data revealed earlier showed UK job vacancies hitting a 20-year high between July and September, while the unemployment rate fell in the three months to August as the jobs market continues to recover.
According to the Office for National Statistics, job vacancies rose by 318,000 from pre-pandemic January to March 2020 levels to 1.1 million, with accommodation and food services seeing a near-50,000 jump.
The unemployment rate, meanwhile, fell to 4.5% in the three months to August from 4.6% in the three months to July.
Additionally, the number of payroll employees rose in September by 207,000 to a record 29.2m, and is now higher than it was before the pandemic.
“The jobs market has continued to recover from the effects of the coronavirus, with the number of employees on payroll in September now well exceeding pre-pandemic levels,” said Darren Morgan, director of economic statistics at the ONS.
“The latest earnings continue to show growth on the year, even after taking inflation into account.
“However, the figures are still being affected by special factors that make it hard to read underlying trends.”
Still on data, retail sales were shown to have eased in September as the UK’s post-pandemic recovery continued to lose momentum.
In the five weeks to 2 October 2021, sales decreased 0.6% on a like-for-like basis against September 2020, when they had jumped 6.1%, according to the latest BRC-KPMG Retail Sales Monitor.
“September saw the slowest retail sales growth since January, when the UK was in lockdown,” said Helen Dickinson, chief executive of the British Retail Consortium.
“There are signs that consumer confidence is being hit as the fuel shortages, combined with wetter weather, had an impact in the second half of the month.”
Further afield, the International Monetary Fund downgraded its forecasts for global growth on Tuesday afternoon, as it cautioned that supply chain issues were denting growth.
In its World Economic Outlook, the IMF cut the global GDP growth forecast for this year by 0.1 percentage points from its July estimate to 5.9%.
It maintained the growth forecast for next year at 4.9%.
“This modest headline revision masks large downgrades for some countries,” said IMF chief economist Gita Gopinath.
“The outlook for the low-income developing country group has darkened considerably due to worsening pandemic dynamics.
“The downgrade also reflects more difficult near-term prospects for the advanced economy group, in part due to supply disruptions.”
In equity markets, low-cost airline easyJet descended 3.49% after saying it expected to post annual losses of more than £1bn due to the Covid pandemic, but added that it turned cash positive in the final quarter of the financial year driven as demand improved.
Gambling firm Entain ticked down 1.66% even after it said third-quarter revenue rose, with in-shop volumes improving as Covid lockdown measures were lifted.
Diversified Energy tumbled 19.91% on the back of a Bloomberg Green article which reported gas leaks at ageing production installations.
On the upside, GlaxoSmithKline was ahead 0.88% after Bloomberg reported that its consumer unit was drawing interest from private equity firms in what could lead to the biggest buyout of all time.
Online supermarket Ocado was also in the green, rising 5.37%, with CMC Markets analyst Michael Hewson pointing across the pond for a catalyst.
“[Ocado’s] US supermarket partner Kroger announced it was expanding its delivery offering, as it looks to expand in the northeast of the US, as well as Florida and California,” he said.
“Kroger uses Ocado fulfilment centres for its delivery operations.”
Elsewhere, shares of drinks maker Britvic fizzed 3.38% higher, having been dented a day earlier by a downgrade to ‘sector perform’ from ‘outperform’ at RBC Capital Markets.
Music intellectual rights specialist Hipgnosis was on the front foot by 4.99% after its investment adviser and NYSE-traded investment manager Blackstone announced a new partnership, backed by funds managed by Blackstone, which would initially deliver $1bn (£0.73bn) to acquire music rights and manage catalogues.
Market Movers
FTSE 100 (UKX) 7,130.23 -0.23%
FTSE 250 (MCX) 22,468.90 -0.08%
techMARK (TASX) 4,538.22 -0.12%
FTSE 100 – Risers
Ocado Group (OCDO) 1,649.50p 5.37%
Coca-Cola HBC AG (CDI) (CCH) 2,487.00p 4.58%
Bunzl (BNZL) 2,440.00p 1.92%
Croda International (CRDA) 8,420.00p 1.91%
Polymetal International (POLY) 1,294.00p 1.89%
B&M European Value Retail S.A. (DI) (BME) 575.20p 1.81%
London Stock Exchange Group (LSEG) 7,754.00p 1.71%
Antofagasta (ANTO) 1,442.00p 1.51%
SSE (SSE) 1,571.50p 1.32%
Land Securities Group (LAND) 698.80p 1.30%
FTSE 100 – Fallers
International Consolidated Airlines Group SA (CDI) (IAG) 175.90p -3.35%
Compass Group (CPG) 1,476.00p -2.16%
Prudential (PRU) 1,458.00p -2.02%
Melrose Industries (MRO) 162.00p -1.91%
Rio Tinto (RIO) 5,014.00p -1.88%
Entain (ENT) 2,073.00p -1.66%
Pearson (PSON) 733.40p -1.50%
ITV (ITV) 102.60p -1.49%
Anglo American (AAL) 2,790.50p -1.43%
Johnson Matthey (JMAT) 2,611.00p -1.40%
FTSE 250 – Risers
TUI AG Reg Shs (DI) (TUI) 271.00p 9.62%
Petropavlovsk (POG) 23.18p 7.61%
Hipgnosis Songs Fund Limited NPV (SONG) 126.40p 4.99%
Trustpilot Group (TRST) 353.00p 3.70%
Biffa (BIFF) 359.00p 3.61%
Investec (INVP) 312.70p 3.44%
Britvic (BVIC) 888.00p 3.38%
IP Group (IPO) 127.40p 3.24%
Spire Healthcare Group (SPI) 225.00p 3.21%
CMC Markets (CMCX) 272.50p 2.84%
FTSE 250 – Fallers
Diversified Energy Company (DEC) 101.40p -19.91%
Endeavour Mining (EDV) 1,800.00p -5.79%
Cineworld Group (CINE) 64.28p -4.94%
Wood Group (John) (WG.) 225.10p -4.38%
Wizz Air Holdings (WIZZ) 4,615.00p -3.84%
easyJet (EZJ) 625.40p -3.49%
Restaurant Group (RTN) 90.30p -3.32%
Network International Holdings (NETW) 314.80p -2.75%
Essentra (ESNT) 255.50p -2.67%
Ferrexpo (FXPO) 318.40p -2.51%
