(Sharecast News) – London stocks were set for a slight rebound on Tuesday morning after falling to a one-month low, as investors digested some key data from the UK labour market, and a surprise rate cut in China overnight.
Futures on the FTSE 100 were pointing to a 0.2% gain to around 7,525. The index had fallen 0.2% the previous session, finishing at 7,507.15, the lowest closing level since 18 July.
The Office for National Statistics revealed that wage growth picked up in July, but so did the jobless rate. Average weekly earnings excluding bonuses in the three months to June were up 7.8% on last year, the highest since records began in 2001.
While the unemployment rate unexpectedly increased from 4% to 4.2% (a 22-month high), the wage figures will likely add to fears that the economy is overheating as the Bank of England continues to struggle to bring down inflation.
In other news, the People’s Bank of China made a surprise cut to interest rates on Tuesday as it looked to stimulate economic demand amid a sputtering recovery. Defying expectations, the central bank cut the rate on 401 billion yuan ($55.25bn) worth of one-year medium-term lending facility (MLF) loans to some financial institutions by 15 basis points to 2.50% from 2.65% previously.
The cash injection was to counteract factors including tax payments in order to “keep banking system liquidity reasonably ample”, the PBOC said in a statement.
In the US, retail sales figures for July will be out on Tuesday, and are expected to show that growth picked up from 0.2% to 0.4% last month. The market is keeping its eye fixed on US economic data after mixed inflation figures last week did little to settle investors’ fears about whether or not the Federal Reserve will pause hiking interest rates at its next policy meeting.
Company news was light on the ground on Tuesday, though Marks & Spencer on Tuesday lifted guidance for half-year profits after strong sales growth in the first 19 weeks of its financial year. “We now expect the outcome for the year to show profit growth on 2022-23, and the interim results to show a significant improvement against previous expectations,” M&S said.
Bunzl announced the acquisitions of three businesses in Spain, the Netherlands, and Canada on Tuesday, as well as the finalisation of another in Brazil. The FTSE 100 company said the acquisitions included a foodservice equipment distributor in Spain, a cleaning product distributor in the Netherlands with an emphasis on robotic and smart cleaning solutions, and a packaging solutions provider in Canada. Additionally, following an earlier announcement, Bunzl said it had finalised the purchase of a specialised safety distributor in Brazil.