London stocks were still in the black by midday on Tuesday following a late-stage rally on Wall Street, as investors digested the latest UK jobs data.
The FTSE 100 was up 0.3% at 7,165.15.
Neil Wilson, head of markets at Markets.com, said: “Cooler rates and broadly positive risk sentiment helped send the Nasdaq composite to a record high on Monday, whilst the tech sector lifted the broader market as the S&P 500 also notched a fresh all-time closing high.
“Mega tech names led the gains for the index, whilst financials were the biggest drag. European stock markets are broadly higher in early trade. Growth/tech have come back, whilst the reopening/reflation trade has cooled somewhat.
“Ahead of the Federal Reserve meeting this week there is no sign of a tantrum. Stocks are happy to catch the tailwinds higher despite being caught between a super-hot inflation reading last week and the Fed’s policy meeting.”
The Fed’s two-day meeting begins later on Tuesday, and investors will be paying close attention to the language from the FOMC’s statement and what the latest economic projections will tell us, Wilson said.
On home shores, figures released earlier by the Office for National Statistics showed the unemployment rate fell to 4.7% in the three months to April from 4.8% in March, in line with consensus expectations. Non-essential shops and outdoor hospitality reopened in April, while indoor hospitality resumed in May.
The data showed the number of payrolled employees rose for the sixth consecutive month, up by 197,000 in May to 28.5m. However, it was still 553,000 below pre-pandemic levels. Since February 2020, the largest declines in payrolled employment have been in the accommodation and food services sector, people aged under 25 years, and those living in London.
ONS head of economic statistics Sam Beckett said: “The number of employees on payroll grew strongly in May, up by almost 200,000, although it is still over half a million down since the pandemic struck.
“Job vacancies continued to recover in the spring, and our early estimates suggest that by May the total had surpassed its pre-pandemic level, with strong growth in sectors such as hospitality. Meanwhile the redundancy rate remains subdued, while the number of employees on furlough has continued to decline.”
On Monday, Prime Minister Boris Johnson announced a four-week delay to the lifting of lockdown in England, which had been due to take place on 21 June. According to reports, Chancellor Rishi Sunak will not be extending furlough support despite the reopening delay.
In equity markets, travel and leisure stocks were on the rise, having fallen on Monday ahead of Johnson’s announcement. British Airways owner IAG, engine maker Rolls-Royce, Upper Crust owner SSP, and budget airlines easyJet and Wizz were all firmer, along with Wagamama owner Restaurant Group.
Russ Mould, investment director at AJ Bell, said: “The hospitality and travel stocks which had sold off ahead of the delay to ‘Freedom Day’ in the UK made partial recoveries as investors welcomed some form of clarity over the new 19 July unlocking date.
“The move had been widely trailed in advance and therefore did not come as a huge shock to the market.”
Elsewhere, Just Eat Takeaway rallied after completing the acquisition of Grubhub.
Primark owner Associated British Foods pushed up, with traders pointing to readacross from a positive first-quarter update from Boohoo.
On the downside, Bellway nudged lower even as it reported strong demand for new homes in the second half of its financial year as buyers looked for larger properties with home-working space.
In broker note action, Intermediate Capital Group was weaker after a downgrade to ‘hold’ from ‘add’ at Numis. Anglo American was hit by a downgrade to ‘sector perform’ from ‘outperform’ at RBC Capital Markets, while PageGroup was knocked lower by a downgrade to ‘underweight’ from ‘equalweight’ at Morgan Stanley.
Market Movers
FTSE 100 (UKX) 7,165.15 0.26%
FTSE 250 (MCX) 22,780.83 0.16%
techMARK (TASX) 4,472.82 0.46%
FTSE 100 – Risers
Associated British Foods (ABF) 2,356.00p 2.79%
International Consolidated Airlines Group SA (CDI) (IAG) 199.90p 2.66%
Ferguson (FERG) 9,862.00p 2.49%
Spirax-Sarco Engineering (SPX) 13,480.00p 2.16%
Ashtead Group (AHT) 5,194.00p 2.12%
Halma (HLMA) 2,849.00p 2.08%
BT Group (BT.A) 195.60p 1.95%
British American Tobacco (BATS) 2,848.00p 1.88%
Kingfisher (KGF) 350.20p 1.71%
Admiral Group (ADM) 3,163.00p 1.70%
FTSE 100 – Fallers
Intermediate Capital Group (ICP) 2,264.00p -3.25%
Anglo American (AAL) 3,026.00p -2.78%
Flutter Entertainment (CDI) (FLTR) 13,325.00p -2.60%
Antofagasta (ANTO) 1,502.00p -1.96%
Smith (DS) (SMDS) 438.10p -1.68%
Glencore (GLEN) 322.80p -1.48%
HSBC Holdings (HSBA) 433.45p -1.37%
Fresnillo (FRES) 852.20p -1.11%
Barclays (BARC) 177.46p -1.08%
BP (BP.) 326.85p -1.07%
FTSE 250 – Risers
easyJet (EZJ) 955.00p 2.40%
Allianz Technology Trust (ATT) 276.00p 2.22%
SSP Group (SSPG) 322.80p 2.12%
Wizz Air Holdings (WIZZ) 4,799.00p 2.11%
Spectris (SXS) 3,333.00p 1.80%
Electrocomponents (ECM) 1,047.00p 1.75%
Avon Rubber (AVON) 2,754.00p 1.70%
Just Eat Takeaway.Com N.V. (CDI) (JET) 6,464.00p 1.62%
RIT Capital Partners (RCP) 2,535.00p 1.60%
Energean (ENOG) 805.00p 1.58%
FTSE 250 – Fallers
Hochschild Mining (HOC) 170.60p -3.18%
Ibstock (IBST) 227.20p -2.91%
Tullow Oil (TLW) 63.00p -2.84%
Pagegroup (PAGE) 588.50p -2.73%
Elementis (ELM) 148.20p -2.69%
RHI Magnesita N.V. (DI) (RHIM) 4,360.00p -2.24%
Virgin Money UK (VMUK) 204.70p -2.20%
Beazley (BEZ) 308.00p -1.72%
CMC Markets (CMCX) 460.50p -1.71%
TP Icap Group (TCAP) 201.00p -1.47%
