London stocks were still in the red by midday on Tuesday amid rising bond yields, as investor digested the latest UK jobs data.
The FTSE 100 was down 0.7% at 7,558.94.
Victoria Scholar, head of Investment at Interactive Investor, said: “European markets have opened lower with technology underperforming amid concerns about faster tightening from the Fed and rising yields as Britain’s 10-year gilt yield hits a three-month high and Germany’s 10-year government bond yield rises to the highest since May 2019. US markets get set to reopen after Monday’s holiday with futures pointing to a softer open.
“The FTSE 100 is trading lower amid some profit taking after a strong start to the week, closing Monday’s session at the highest level since January 2020. BP and Shell are trading near the top of the index as surging oil prices provide a tailwind for the sector.”
On the macroeconomic front, data released earlier by the Office for National Statistics showed the unemployment rate has eased, as companies continued to hire more staff despite the emergence of the Omicron variant.
There were 29.5m payrolled employees in the UK in December, up 184,000 on November’s revised figure, and 409,000 higher than in February 2020. Analysts had been looking for an increase closer to 125,000.
The broader unemployment rate for September to November eased by 0.4 percentage points to 4.1%, marginally below consensus for 4.2%. The rate is now just 0.1 percentage points higher than before the pandemic.
The employment rate remains 1.1 percentage points below pandemic, however, at 75.5%, in part because of a rise in the economic inactivity rate, which is now estimated at 21.3%, 1.0 percentage point higher than before the pandemic and 0.2 percentage points higher than the previous three-month period.
Job vacancies also remained high, rising to a new record in October to December of 1,247,000, up 462,000 on the pre-pandemic level seen in January to March 2020.
Regular pay in the three months to November fell to 3.8% year-on-year from 4.3% in the previous month.
Richard Hunter, head of markets at Interactive Investor, said: “The jobless numbers implied a market in generally good health. The impact of the removal of the furlough scheme and the Omicron variant seems to have been initially limited, with a drop in unemployment numbers and another increase in job vacancies suggesting that the widespread staff shortages reported at the end of last year could be a short-lived effect.”
In equity markets, 888 Holdings fell even as the online betting and gaming company said full-year revenues had grown year-on-year despite a drop in the final quarter of 2021.
On the upside, education publisher Pearson was the standout gainer on the top-flight index ahead of its January trading update on Wednesday.
Oil giants BP and Shell gushed higher as oil prices surged, with Brent crude hitting its best level since 2014.
Just Group rallied after it posted a 25% jump in full-year retirement income sales to £2.7bn.
Qinetiq rose as the defence technology firm said it was on track to meet its full-year expectations after “strong” progress in the third quarter.
Marshalls pushed higher as the landscaping specialist lifted full-year guidance after a strong final quarter of the last fiscal year which helped drive a 26% increase in annual revenue.
Alternative asset management firm Petershill Partners advanced after saying it made $458m in acquisitions in the fourth quarter, which are expected to be immediately accretive to consensus earnings forecasts.
Market Movers
FTSE 100 (UKX) 7,558.94 -0.69%
FTSE 250 (MCX) 22,586.53 -1.25%
techMARK (TASX) 4,483.01 -0.77%
FTSE 100 – Risers
Pearson (PSON) 634.80p 3.05%
Vodafone Group (VOD) 121.98p 2.61%
BT Group (BT.A) 185.65p 2.54%
Sainsbury (J) (SBRY) 296.40p 1.30%
Royal Dutch Shell ‘A’ (RDSA) 1,866.40p 1.28%
Royal Dutch Shell ‘B’ (RDSB) 1,868.40p 1.25%
M&G (MNG) 216.00p 0.98%
Lloyds Banking Group (LLOY) 55.67p 0.98%
BP (BP.) 397.50p 0.95%
Phoenix Group Holdings (PHNX) 691.00p 0.73%
FTSE 100 – Fallers
Polymetal International (POLY) 1,098.50p -4.81%
Rightmove (RMV) 662.60p -4.00%
Evraz (EVR) 551.00p -3.84%
Croda International (CRDA) 8,228.00p -3.59%
Ashtead Group (AHT) 5,538.00p -3.52%
Ocado Group (OCDO) 1,410.00p -3.33%
Halma (HLMA) 2,584.00p -3.22%
Scottish Mortgage Inv Trust (SMT) 1,114.00p -3.09%
Dechra Pharmaceuticals (DPH) 4,106.00p -2.84%
JD Sports Fashion (JD.) 190.45p -2.83%
FTSE 250 – Risers
Just Group (JUST) 94.90p 10.09%
Energean (ENOG) 968.50p 5.73%
QinetiQ Group (QQ.) 283.80p 4.80%
Plus500 Ltd (DI) (PLUS) 1,486.00p 3.37%
Elementis (ELM) 139.20p 3.34%
Marshalls (MSLH) 708.00p 2.83%
Petershill Partners (PHLL) 243.50p 2.53%
Baltic Classifieds Group (BCG) 229.00p 2.23%
SSP Group (SSPG) 288.70p 2.01%
Capricorn Energy (CNE) 195.30p 1.77%
FTSE 250 – Fallers
Trustpilot Group (TRST) 225.60p -7.08%
Ferrexpo (FXPO) 251.60p -5.48%
NCC Group (NCC) 225.00p -5.46%
Games Workshop Group (GAW) 7,960.00p -5.07%
Petropavlovsk (POG) 15.83p -5.04%
Howden Joinery Group (HWDN) 807.00p -4.66%
Aston Martin Lagonda Global Holdings (AML) 1,295.50p -4.43%
Allianz Technology Trust (ATT) 288.50p -4.31%
Monks Inv Trust (MNKS) 1,168.00p -4.26%
Genus (GNS) 4,014.00p -3.83%
