London open: Stocks edge up as investors mull UK jobs data

by | Sep 12, 2023

(Sharecast News) – London stocks edged up in early trade on Tuesday following a solid session on Wall Street, as investors mulled the latest UK jobs data.
At 0830 BST, the FTSE 100 was up 0.2% at 7,515.08.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “Sentiment is erring on the positive, helped by an easing of property woes in China, with the FTSE 100 higher in early trade.

“Debt-laden giant Country Garden has won creditor approval to extend payments on some bonds adding to a slightly more optimistic take on China’s economic prospects. Brent Crude has inched up a little, ahead of key market insight reports later, still supported by extended supply cuts.

“Wage growth is still hot in Britain and the temperature isn’t coming down much, providing little relief for Bank of England policymakers who need more evidence that employers are showing restraint before they’ll feel confident about pressing pause on interest rate hikes.”

Figures released earlier by the Office for National Statistics showed that wage growth remained at its highest level in 22 years in July, but the unemployment rate ticked higher.

Average regular earnings growth was unchanged at 7.8% in the three months to July, above consumer price inflation of 6.8%, while the unemployment rate nudged up to 4.3% from 4.2%.

Growth in average total pay – which includes bonuses – was 8.5% in July, up from 8.2%, as one-off payments to NHS workers and civil servants after deals to end strike action provided a boost.

The number of job vacancies in the three months to August was 989,000, down 64,000 from the previous quarter, the ONS said.

Director of economic statistics Darren Morgan said: “Earnings in cash terms continue to increase, at a record rate outside the pandemic-affected period.

“Coupled with lower inflation, this means people’s real pay is no longer falling.

“Unemployment continues to increase in the latest three months. Correspondingly, employment is down, driven by falls among men and the self-employed.

“The proportion of people neither working or looking for a job is slightly up, with more students, as well as the long-term sick reaching yet another record.”

Elsewhere, the latest data from Kantar showed that grocery price inflation fell to its lowest level in a year at 12.2% for the four weeks to 3 September, but 19 out of 20 shoppers are worried about the cost of their shopping.

Fraser McKevitt, head of retail and consumer insight at Kantar, explains: “Grocery price inflation is down for the sixth month in a row but 12.2% won’t be a number to celebrate for many households. Our data shows that 95% of consumers are still worried about the impact of rising grocery prices, matched only by their concern about energy bills.

“After a full year of double digit grocery inflation, it’s no surprise that just under a quarter of the population consider themselves to be struggling financially – although this is a very slight drop compared to May.”

In equity markets, Associated British Foods gained as it lifted annual guidance again, boosted by a recovery at its Primark retail chain and a strong performance from food operations.

AB Foods said it now expected full-year adjusted operating profit to be “slightly better” than previous guidance, when it said earnings would be “moderately ahead” of 2021/22’s £1.43bn.

Primark like-for-like sales growth for the financial year is now tipped to be around 9%, with like-for-like sales likely to be around 7% in the second half. For the financial year as a whole, sales are forecast to be around 15% ahead year on year, it added.

JTC was a high riser after the provider of fund administration services said it expects to deliver full-year results ahead of current market expectations.

On the downside, Smurfit Kappa shares tumbled after the company said it had agreed to merge with US rival WestRock in a deal that will create a $20bn packaging giant.

Under the terms of the transaction, shareholders of US-based WestRock will receive one new Smurfit WestRock share and $5 in cash. This represents a total consideration equivalent to $43.51 per share, based on the Smurfit closing price on Monday.

Aerospace, defence and security tech group Chemring was under the cosh after saying it remains on track to hit forecasts this year, but only as long as the US Department of Defense signs off a £25m order.

Market Movers

FTSE 100 (UKX) 7,515.08 0.24%
FTSE 250 (MCX) 18,527.91 0.03%
techMARK (TASX) 4,343.22 0.38%

FTSE 100 – Risers

BT Group (BT.A) 114.90p 1.59%
Vodafone Group (VOD) 76.24p 1.48%
Endeavour Mining (EDV) 1,541.00p 1.38%
Lloyds Banking Group (LLOY) 42.09p 1.23%
Melrose Industries (MRO) 491.00p 1.13%
Airtel Africa (AAF) 115.30p 1.05%
Fresnillo (FRES) 585.80p 1.00%
Kingfisher (KGF) 232.00p 0.87%
Associated British Foods (ABF) 2,018.00p 0.85%
AstraZeneca (AZN) 10,590.00p 0.84%

FTSE 100 – Fallers

Smurfit Kappa Group (CDI) (SKG) 2,738.00p -10.76%
Antofagasta (ANTO) 1,496.50p -0.86%
Ashtead Group (AHT) 5,106.00p -0.85%
Mondi (MNDI) 1,295.50p -0.73%
CRH (CDI) (CRH) 4,341.00p -0.64%
Weir Group (WEIR) 1,897.00p -0.63%
Smith (DS) (SMDS) 288.70p -0.62%
Severn Trent (SVT) 2,426.00p -0.61%
Burberry Group (BRBY) 2,115.00p -0.56%
BP (BP.) 514.40p -0.56%

FTSE 250 – Risers

JTC (JTC) 702.50p 4.15%
Warehouse Reit (WHR) 84.00p 3.58%
Watches of Switzerland Group (WOSG) 619.50p 3.42%
W.A.G Payment Solutions (WPS) 90.80p 3.18%
Hilton Food Group (HFG) 740.00p 2.64%
Ferrexpo (FXPO) 80.15p 2.43%
Jupiter Fund Management (JUP) 98.45p 2.29%
Lancashire Holdings Limited (LRE) 600.50p 2.04%
Bank of Georgia Group (BGEO) 3,420.00p 1.94%
Genuit Group (GEN) 328.00p 1.86%

FTSE 250 – Fallers

Chemring Group (CHG) 292.50p -3.94%
North Atlantic Smaller Companies Inv Trust (NAS) 3,450.00p -2.82%
Wizz Air Holdings (WIZZ) 1,919.00p -1.82%
Synthomer (SYNT) 47.28p -1.34%
Babcock International Group (BAB) 387.00p -1.33%
Big Yellow Group (BYG) 1,013.00p -1.27%
IWG (IWG) 170.10p -1.16%
TI Fluid Systems (TIFS) 123.00p -1.13%
Direct Line Insurance Group (DLG) 174.10p -1.08%
Games Workshop Group (GAW) 10,370.00p -1.05%

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