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London open: FTSE falls as rate cut expectations scaled back; jobs data in focus
London stocks fell in early trade on Tuesday as investors mulled the latest UK jobs data, and as hawkish comments from central bankers dampened rate cut hopes.
At 0840 GMT, the FTSE 100 was down 0.6% at 7,551.41.
Sentiment took a hit after Bundesbank President Joachim Nagel said on Monday that it was too early to talk about rate cuts, while Austrian central bank governor Robert Holzmann said we shouldn’t count on rate cuts at all in 2024.
On home shores, figures released earlier by the Office for National Statistics showed that wage growth eased in the three months to November, while unemployment was unchanged.
Total pay including bonuses rose 6.5%, down from 7.2% in the previous three-month period and in line with consensus expectations.
Meanwhile, the unemployment rate was unchanged at 4.2% in the three months to November and the ONS estimated that the number of payrolled employees in December fell by 24,000 from a revised November figure to 30.2m.
The ONS data showed that the number of vacancies fell by 49,000 in the three months to December to 934,000. This marked the 18 consecutive decline and the longest run of falls ever recorded.
Susannah, Streeter, head of money and markets at Hargreaves Lansdown, said: “More cautious sentiment has descended as the glow of hope for early interest rate cuts fades, while the latest jobs data for the UK shows potentially fresh fragility for the economy.
“Wage growth came down more quickly than forecast, indicating that employers are more wary of succumbing to big pay demands given the uncertain climate. However, the labour market still remains quite tight, with the employment rate up slightly on the quarter.
“With unemployment steady, Bank of England policymakers are still expected to repeat the mantra that interest rates will have to stay elevated for an extended period of time. Robert Holzmann, who suggested current upwards price pressures could mean policymakers hold off rate cuts this year.
“The realisation that central banks could still be facing the foe of stubborn inflation has been dampening spirits, especially with the potential for geopolitical risk to widen.”
In equity markets, Rightmove was knocked lower by a downgrade to ‘underweight’ from ‘neutral’ at JPMorgan, while Rolls-Royce was hit by a downgrade to ‘sell’ at Berenberg.
Moneysupermarket was also weaker after rating downgrades at Jefferies and Investec.
Trsutpilot slumped after Berenberg sold just over 5.17m shares in the review website in a placing on behalf of shareholder Northzone.
On the upside,Ocado surged after the online grocer forecast a return to positive earnings for the 2022/23 year as fourth-quarter revenues rose by almost 11%.
Experian rallied as it narrowed its full-year targets to the upper end of guidance after a strong third quarter with revenue growth accelerating from the first half.
Vodafone gained after saying it has signed a 10-year strategic partnership with Microsoft which will see the UK telecoms group invest $1.5bn over the next decade to transform its customer experience using generative artificial intelligence.
Qinetiq advanced as the defence and security firm backed its full-year expectations, hailed “excellent” order intake and announced plans to launch a share buyback of up to £100m.
Direct Line was boosted by an upgrade to ‘buy’ at Berenberg.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Ocado Group Plc | +5.56% | +34.40 | 653.40 |
| 2 |  |
Experian Plc | +2.37% | +74.00 | 3,200.00 |
| 3 |  |
Persimmon Plc | +2.00% | +29.00 | 1,479.50 |
| 4 |  |
Burberry Group Plc | +1.65% | +20.00 | 1,232.00 |
| 5 |  |
Pearson Plc | +1.31% | +12.80 | 992.60 |
| 6 |  |
Direct Line Insurance Group Plc | +1.27% | +2.15 | 171.65 |
| 7 |  |
Hikma Pharmaceuticals Plc | +1.14% | +22.00 | 1,955.00 |
| 8 |  |
Marks And Spencer Group Plc | +0.85% | +2.20 | 262.20 |
| 9 |  |
Anglo American Plc | +0.75% | +13.60 | 1,838.40 |
| 10 |  |
Hargreaves Lansdown Plc | +0.74% | +5.40 | 734.80 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Rightmove Plc | -4.82% | -27.20 | 537.60 |
| 2 |  |
Astrazeneca Plc | -2.97% | -322.00 | 10,530.00 |
| 3 |  |
Standard Chartered Plc | -1.59% | -9.60 | 595.40 |
| 4 |  |
Itv Plc | -1.48% | -0.90 | 59.78 |
| 5 |  |
Auto Trader Group Plc | -1.41% | -10.00 | 697.60 |
| 6 |  |
Fresnillo Plc | -1.40% | -7.40 | 519.80 |
| 7 |  |
Lloyds Banking Group Plc | -1.31% | -0.57 | 43.25 |
| 8 |  |
Bt Group Plc | -1.20% | -1.40 | 114.90 |
| 9 |  |
Rolls-royce Holdings Plc | -1.20% | -3.60 | 296.40 |
| 10 |  |
Smith (ds) Plc | -1.13% | -3.30 | 289.90 |
Tuesday newspaper round-up: Shell, fuel retailers, Sizewell C
Shell’s board faces a shareholder rebellion as large investors including the UK’s biggest pension scheme prepare to back a climate activist resolution. Twenty-seven investors have agreed to back a resolution filed by the Dutch shareholder activists at Follow This that calls for the oil company to align its medium-term emissions reduction targets with the 2015 Paris agreement. – Guardian
Fuel retailers will be forced to share near-live information on price changes at the pump to help drivers find the cheapest petrol and diesel, after the government accused them of treating motorists as “cash cows”. Petrol station owners will be required to provide data within half an hour of any change as part of a political effort to bring transparency to the sector amid concerns that drivers are being ripped off. – Guardian
Sir James Dyson has turned to a car industry veteran to run his gadget empire, years after he sank £500m into a doomed attempt to build an electric vehicle. Hanno Kirner, who has had executive stints at Jaguar Land Rover, Rolls-Royce and Aston Martin, will become Dyson’s new chief next month, replacing Roland Krueger after four years. – Telegraph
Plans for the construction of a second new nuclear power plant in Britain have moved a step closer after a development consent order was officially triggered. Sizewell C in Suffolk is expected to cost about £20 billion and could generate enough energy to power six million homes. – The Times
The Greek government is to sell more than half of its majority stake in Athens International Airport, which could result in control of the gateway moving to Germany. The Greek government said that it aimed to dispose of a 30 per cent stake in Athens airport, also known as Eleftherios Venizelos after the Greek national liberation leader, in an initial public offering on the local stock market. That could be as early as next month. The stake could be worth €800 million, according to industry estimates. – The Times
