London stocks were in the red by midday on Thursday as investors digested the latest UK jobs data, with energy shares under the cosh amid expectations of rising supply.
The FTSE 100 was down 0.6% at 7,051.41, while sterling was 0.2% firmer against the dollar at 1.3886, having been weaker earlier.
Sophie Griffiths, market analyst at Oanda, said: “Broadly speaking, sentiment is downbeat. The rising number of cases is reminding the markets that Covid remains a risk, despite successful vaccination programmes in some countries. As such, Covid fears are driving a rotation out of cyclicals – stocks that are more closely linked to the health of the economy, such as banks and carmakers – and travel stocks as more flying restrictions are imposed.
“The travel sector had its hopes pinned on a reasonable summer period after months of paralysis, but it doesn’t look likely this will materialise. Spain’s economy was also in need of a tourist boost across the key summer months. However, with the UK government moving the Balearics back to the amber list, this is also looking unlikely.”
On the macro front, figures released earlier by the Office for National Statistics showed the number of employees on UK payrolls rose by 356,000 in June as the labour market continued to recover from the worst of the pandemic.
The increase took the total of payroll employees to 28.9 million but the figure remains 206,000 less than before the crisis with many jobs preserved by government support.
The unemployment rate edged down 0.2 percentage point to 4.8% and the redundancy rate fell to pre-pandemic levels. From April to June there were 862,000 vacancies – 77,500 more than the pre-crisis level in the first three months of 2020.
Darren Morgan, the ONS’s director of economic statistics, said: “The labour market is continuing to recover, with the number of employees on payroll up again strongly in June. However it is still over 200,000 down on pre-pandemic levels, while a large number of workers remain on furlough.
“The number of job vacancies continued to rise very strongly. The biggest sector driving this was hospitality, followed by wholesaling and retailing.”
In equity markets, Shell and BP gushed lower as oil prices fell amid expectations of more supply after a truce between Saudi Arabia and the UAE.
Just Eat Takeaway.com slumped even after it said losses had peaked and it expected to move back into profit after orders increased by more than half in the first six months of 2021.
IG market analyst Chris Beauchamp said: “A 733% gain in UK order growth just doesn’t cut it any more, it appears, and in any case matching this for the next half is likely to prove impossible, given the expected return to pubs and restaurants and the concomitant decline in takeaway orders.
“Having hit a lower high in June the downtrend remains firmly in place, and the stock’s performance for the period since October 2020 remains almost the complete inverse of the FTSE 100. Tech stocks might be back in fashion in the US, but Just Eat has yet to convince the doubters it seems.”
British Airways and Iberia parent IAG, engine marker Roll-Royce, budget airline easyJet and travel company Tui were also down amid ongoing worries about the impact of Covid-19.
On the upside, cybersecurity firm Avast surged to the top of the FTSE 100 after confirming it was in advanced talks over a merger with NortonLifeLock.
Credit-checking firm Experian rallied after lifting its full-year expectations as it reported a 31% jump in first-quarter revenues, with all regions and segments delivering growth.
B&Q owner Kingfisher gained after it said late on Wednesday that first-half adjusted pre-tax profit was set to be ahead of its previous expectations after better-than-anticipated second-quarter trading.
Precious metals miners Hochschild and Centamin also shone as gold prices rose.
Market Movers
FTSE 100 (UKX) 7,051.41 -0.56%
FTSE 250 (MCX) 22,609.11 -0.62%
techMARK (TASX) 4,393.43 -0.88%
FTSE 100 – Risers
Avast (AVST) 579.40p 14.91%
Experian (EXPN) 3,106.00p 4.33%
Prudential (PRU) 1,380.00p 2.68%
Kingfisher (KGF) 367.20p 1.35%
Diageo (DGE) 3,519.50p 0.93%
Admiral Group (ADM) 3,293.00p 0.86%
Bunzl (BNZL) 2,614.00p 0.77%
Croda International (CRDA) 7,794.00p 0.65%
InterContinental Hotels Group (IHG) 4,669.00p 0.60%
Spirax-Sarco Engineering (SPX) 14,340.00p 0.60%
FTSE 100 – Fallers
Just Eat Takeaway.Com N.V. (CDI) (JET) 6,143.00p -4.34%
BP (BP.) 296.15p -2.82%
Taylor Wimpey (TW.) 158.50p -2.46%
Royal Dutch Shell ‘A’ (RDSA) 1,411.40p -2.20%
Royal Dutch Shell ‘B’ (RDSB) 1,378.60p -2.16%
International Consolidated Airlines Group SA (CDI) (IAG) 167.28p -2.13%
JD Sports Fashion (JD.) 904.40p -2.10%
Next (NXT) 7,634.00p -2.00%
ITV (ITV) 122.05p -1.93%
Informa (INF) 487.40p -1.89%
FTSE 250 – Risers
Hochschild Mining (HOC) 160.00p 2.17%
Centamin (DI) (CEY) 105.15p 2.09%
Restaurant Group (RTN) 117.20p 1.91%
Trustpilot Group (TRST) 399.40p 1.68%
Domino’s Pizza Group (DOM) 416.20p 1.41%
PZ Cussons (PZC) 256.00p 1.39%
Syncona Limited NPV (SYNC) 224.00p 1.36%
888 Holdings (888) 384.80p 1.32%
Howden Joinery Group (HWDN) 890.00p 1.14%
Templeton Emerging Markets Inv Trust (TEM) 997.00p 1.01%
FTSE 250 – Fallers
Network International Holdings (NETW) 342.30p -7.03%
Cineworld Group (CINE) 61.14p -4.62%
Just Eat Takeaway.Com N.V. (CDI) (JET) 6,143.00p -4.34%
Hays (HAS) 160.60p -4.23%
Tullow Oil (TLW) 49.99p -4.16%
Ashmore Group (ASHM) 394.60p -3.76%
Auction Technology Group (ATG) 1,238.00p -3.43%
Telecom Plus (TEP) 1,070.00p -3.43%
XP Power Ltd. (DI) (XPP) 5,140.00p -2.84%
Watches of Switzerland Group (WOSG) 917.00p -2.65%
