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London open: Stocks edge higher ahead of jobs data
London stocks edged up in early trade on Tuesday following losses in the previous session, as investors sifted through a raft of corporate news and eyed the release of key UK jobs data.
At 0830 GMT, the FTSE 100 was up 0.3% at 7,347.68, while the pound was down 0.2% against the dollar at 1.2835 and 0.1% lower versus the euro at 1.1643, having rallied a day earlier after the Brexit Party said it would not stand in the 317 seats won by the Conservatives in the last general election.
On the macro front, the ILO unemployment rate, claimant count and average earnings are all out at 0930 GMT.
CMC Markets analyst Michael Hewson said: “Last month the unemployment rate did tick higher from 3.8% to 3.9% with some concern that it might be well have bottomed out and start to edge higher again, after months of slowly declining. The surprise has been that with all the job losses that have been a feature of this year in retail this hasn’t happened sooner, however it would appear that the UK labour market is more resilient than thought.
“Against this backdrop it’s easy to forget that wages have been rising at near to 4% on a rolling three-month basis, while unemployment has remained down near 40-year lows. At a time when the debate over Brexit has poisoned the political discourse, this has been a welcome relief to hard pressed consumers, at a time when inflation has seen falls to below the Bank of England target rate. In terms of real incomes that has been a very positive story to tell.
“This morning’s unemployment and wages numbers for the three months to September are expected to remain steady, with unemployment steady at 3.9%, with wages set to come in at 3.8%.”
Later in the day, market participants will shift their attention across the pond for a speech by US President Donald Trump at the New York Economic Club.
Neil Wilson, chief market analyst at Markets.com, said: “This poses all kinds of risks – on everything from China and trade to the Fed and impeachment. Markets will be on tenterhooks. The president’s speeches are akin to throwing a dart blindfolded.
“We may get an update on planned US tariffs on EU autos, which are expected to be delayed for six months. The deadline for the president to kick this into the long grass is tomorrow.”
In equity markets, Aveva was the top riser after the software company said it swung to a profit in the first half, with good growth across all its geographic regions.
Experian followed close behind as the credit-checking firm lifted its full-year organic revenue guidance and reported a rise in first-half profit and revenue.
ITV advanced as the broadcaster said strong US demand for its reality programming drove a rise in third-quarter advertising revenues to the top end of expectations.
Vodafone was a high riser after it lifted its full-year profit guidance and said sales core organic earnings increased 1.4% in the first half.
Oxford Instruments gained as it posted a 55% jump in first-half pre-tax profit, while pub group Marston’s was boosted by an upgrade to ‘add’ at Peel Hunt.
On the downside, sales, marketing and support services group DCC slumped despite releasing in-line first-half results and announcing the acquisition of Ion Laboratories, a US provider of contract manufacturing and related services to the health supplements market.
Land Securities was in the red after the property company said it swung to a loss in the first half amid challenging conditions in the retail market.
B&M European Value Retail also fell after saying it will undertake a strategic review to determine the future of its German business, Jawoll.
Electrocomponents retreated as it reported a 4.3% drop in first-half pre-tax profit, while Trainline slumped after a group of investors led by shareholder KKR sold their shares in the rail booking company.
