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London open: Stocks rise after UK jobs data, ahead of US inflation
London stocks rose in early trade on Tuesday as investors mulled the latest UK jobs numbers and looked ahead to the release of US inflation figures.
At 0840 GMT, the FTSE 100 was 0.4% firmer at 7,982.75.
Data released earlier by the Office for National Statistics showed that regular pay grew more than expected in the final three months of last year, but real pay kept falling.
The unemployment rate was stable at 3.7% in December, while annual wage growth rose by 6.7% in the period between October and December, up from 6.5% and ahead of expectations for it to remain flat. The ONS said this was the fastest rate of growth seen outside of the pandemic.
Taking into account inflation, however, this marked a 2.5% decline.
Growth in average total pay including bonuses was 5.9%, down from 6.5%. Taking into account inflation, this was a 3.1% decline. “This is smaller than the record fall in real total pay we saw in February to April 2009 (4.5%), but remains among the largest falls in growth since comparable records began in 2001,” the ONS said.
The number of people in employment rose by 74,000 in the period between October and December to 32.8m, taking the employment rate to 75.6%, up 0.2 percentage points.
The data showed that 843,000 working days were lost in December because of strike action, which is the highest since November 2011. It also showed that In November 2022 to January 2023, vacancies fell by 76,000 on the quarter to 1,134,000, marking the seventh consecutive quarterly fall since May to July 2022.
“The fall in the number of vacancies reflects uncertainty across industries, as survey respondents continue to cite economic pressures as a factor in holding back on recruitment,” the ONS said.
Capital Economics said: “December’s labour market data showed that, despite an easing in labour demand, labour market conditions stayed tight and the market continues to support strong wage growth.
“The Bank of England will be increasingly concerned about the persistence of domestic inflationary pressures as private sector wage growth (excluding bonuses) exceeded its forecast. This supports our view that the Bank of England will have to raise interest rates from 4.00% now to a peak of 4.50% in the coming months.”
In equity markets, Coca-Cola HBC was the top gainer on the FTSE 100 after well-received full-year results, while Vodafone rallied after Liberty Global bought a 4.9% stake in the company.
Plus 500 was higher after posted a 16% jump in full-year revenues to $832.6m, and a 17% increase in earnings before interest, taxes, depreciation and amortisation to $453m.
Holiday operator TUI gained after it said summer bookings were up 20% and reported a narrowing of first-quarter losses, as travel continued to rebound from the effects of the Covid pandemic.
Gambling company Flutter Entertainment rose after saying it was considering a US listing and would starting consulting shareholders on the matter as its FanDuel operation grew in importance to the group.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
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| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Vodafone Group Plc | +3.94% | +3.70 | 97.70 |
| 2 |  |
Easyjet Plc | +3.81% | +17.90 | 488.10 |
| 3 |  |
Bt Group Plc | +3.65% | +4.90 | 139.00 |
| 4 |  |
Coca-cola Hbc Ag | +3.37% | +65.50 | 2,007.00 |
| 5 |  |
Tui Ag | +2.54% | +4.35 | 175.55 |
| 6 |  |
Hargreaves Lansdown Plc | +1.75% | +16.40 | 952.20 |
| 7 |  |
Centrica Plc | +1.72% | +1.68 | 99.62 |
| 8 |  |
Flutter Entertainment Plc | +1.43% | +180.00 | 12,725.00 |
| 9 |  |
Astrazeneca Plc | +1.38% | +158.00 | 11,580.00 |
| 10 |  |
International Consolidated Airlines Group S.a. | +1.26% | +2.04 | 164.30 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
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| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Rolls-royce Holdings Plc | -1.21% | -1.32 | 108.14 |
| 2 |  |
Hsbc Holdings Plc | -0.68% | -4.20 | 609.50 |
| 3 |  |
Prudential Plc | -0.50% | -6.50 | 1,287.00 |
| 4 |  |
Admiral Group Plc | -0.49% | -11.00 | 2,223.00 |
| 5 |  |
Fresnillo Plc | -0.38% | -3.00 | 791.40 |
| 6 |  |
Standard Chartered Plc | -0.33% | -2.40 | 727.40 |
| 7 |  |
Ferguson Plc | -0.25% | -30.00 | 12,080.00 |
| 8 |  |
Direct Line Insurance Group Plc | -0.17% | -0.30 | 179.80 |
| 9 |  |
Antofagasta Plc | -0.15% | -2.50 | 1,709.50 |
| 10 |  |
Kingfisher Plc | -0.11% | -0.30 | 277.30 |
US close: Stocks rise ahead of key inflation print
Wall Street stocks were higher at the opening bell on Monday as both the S&P 500 and Nasdaq Composite strained to recover from their worst weekly showing since late last year.
At the close, the Dow Jones Industrial Average was up 1.11% at 34,245.93, while the S&P 500 advanced 1.14% to 4,137.29 and the Nasdaq Composite crossed the line 1.48% firmer at 11,891.79.
The Dow closed 376.66 points higher on Monday, extending the gains it recorded on Friday when major indices wrapped up a volatile week with a mixed performance.
Market participants were looking ahead to Tuesday’s consumer price index, with traders hoping to gain some kind of insight into the pace of inflation and to figure just what the Federal Reserve could do next in order to combat it.
On the macro front, Federal Reserve banker Michelle Bowman said the central bank would need to continue hiking and raise interest rates in order to get them to a level high enough to bring inflation back down to its target rate.
“I expect we’ll continue to increase the federal funds rate because we have to bring inflation back down to our 2% goal and in order to do that we need to bring demand and supply into better balance,” Bowman said in front of an American Bankers Association conference in Florida.
In the corporate space, Avis Budget Group was up 2.64% and Denny’s managed gains of 0.83% ahead of both reporting earnings after the close of trading.
Coca-Cola, Marriott, Airbnb, Kraft Heinz, and Paramount were also all set to publish quarterly earnings figures before the week is out.
Tuesday newspaper round-up: Vodafone, Toyota, Arm
The US telecoms group chaired by “cable cowboy” John Malone has snapped up a stake in Vodafone in a bet on the UK company’s revival – but has ruled out making a takeover bid. Liberty Global, which is an investor in ITV and Virgin Media O2, told investors on Monday it had acquired a 4.92% stake in Vodafone, saying it believed the shares were undervalued. – Guardian
Hydrogen is to be pumped into Britain’s main gas pipeline by 2025 as part of a scramble to ditch fossil fuels and move to net zero. Between 2pc and 5pc of the fuel flowing through the country’s transmission network will be hydrogen in two years under plans drawn up by National Gas, which owns the pipelines. – Telegraph
Toyota is to accelerate its shift to electric vehicles as the world’s biggest carmaker unveiled plans to launch a new battery-powered flagship model. Koji Sato, chief executive of Toyota, said “the timing is right” to invest in new manufacturing methods to make electric vehicles in the latest sign the manufacturer is backing away from its hydrogen ambitions. – Telegraph
The number of directors banned for abusing pandemic support schemes has more than doubled in the current financial year compared with the whole of the previous 12 months. Official figures from the government’s Insolvency Service show that in the ten months from April last year to January, 312 director disqualifications were linked to misuse of Covid-19 financial programmes, such as the £47 billion bounce back loan scheme. – The Times
Arm is recruiting more people in the UK than in any other part of the world, bucking the trend of layoffs in the technology sector and a sign of the company’s commitment to its global headquarters in Cambridge. The microchip designer is looking for 500 new employees and 350 of those roles are in its Cambridge, Manchester, Warwick and Sheffield locations. The jobs, from graduate level to more senior hires, include software and hardware engineers, safety engineers, analysts and apprentices. Founded in Cambridge, Arm is owned by SoftBank, the Japanese investment group. It creates the blueprint for microchips in products such as Apple’s iPhones, customers pay an upfront licence fee for the design and an additional royalty every time a chip is created from it. – The Times
