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London open: Stocks fall as investors mull jobs data
London stocks fell in early trade on Tuesday as the latest UK jobs data made it more likely the Bank of England will hold rates this week.
At 0835 GMT, the FTSE 100 was down 0.6% at 8,212.40.
Figures released earlier by the Office for National Statistics showed the unemployment rate was steady in the three months to October, while pay growth picked up.
The unemployment rate came in at 4.3%, unchanged from the previous month.
Meanwhile, average pay, including and excluding bonuses, rose 5.2% per year. This compares to 4.9% growth for regular earnings in the previous three months, and 4.4% for total earnings.
The data also showed that vacancies fell by 31,000 on the quarter to 818,000 in September to November 2024. This marked 29 months of consecutive falls but they are still higher than before the pandemic.
Liz McKeown, director of statistics at the ONS, said: “After slowing steadily for over a year, growth in pay excluding bonuses increased slightly in the latest period, driven by stronger growth in private sector pay. Pay growth including bonuses increased by more, but this reflects previous figures being affected by the one-off payments made to some public sector employees in 2023.
“The number of people on payrolls grew slightly in October, but we have seen annual growth rates continue to slow, showing a consistent trend with our latest jobs data from employers. The number of job vacancies has also fallen again, though the total remains a little above where it was before the pandemic.”
Private sector pay growth rose from 4.9% to 5.4%.
Matt Britzman, senior equity analyst at Hargreaves Lansdown, said: “Adjusted for inflation, real wages continued to climb, but the stronger print has all but assured the Bank of England will hold rates steady on Thursday, with markets pricing in a 93% chance of no change.
“Investors are now in wait-and-see mode, watching whether the labour market cools in the wake of the Budget, with February’s rate cut prospects looking like a coin toss.”
In equity markets, Bunzl was the worst performer on the top-flight index as it said volume growth in the third quarter was expected to continue in the fourth , although deflation was likely to be more persistent than previously anticipated.
The distribution and outsourcing company said this was expected to have a “slight” impact on group adjusted operating profit in 2024, driven by Continental Europe.
Oil giants BP and Shell both gushed lower as oil prices fell.
Capita tumbled as the outsourcer reported an 8% drop in revenue for the 11 months to 30 November due to contract losses. It also said it was lifting its cost savings target to £250m by December 2025 from £160m and plans to increase the use of AI and generative AI.
On the upside, LSE Group was a little firmer after UBS raised its stance on the stock to ‘buy’.
Britvic also gained after Carlsberg‘s purchase of the soft drinks maker was given the green light by the UK’s competition regulator.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Flutter Entertainment Plc | +0.69% | +150.00 | 21,850.00 |
| 2 |  |
London Stock Exchange Group Plc | +0.65% | +75.00 | 11,590.00 |
| 3 |  |
International Consolidated Airlines Group S.a. | +0.61% | +1.80 | 298.20 |
| 4 |  |
Rentokil Initial Plc | +0.57% | +2.30 | 408.30 |
| 5 |  |
Standard Chartered Plc | +0.48% | +4.80 | 996.20 |
| 6 |  |
Ashtead Group Plc | +0.47% | +24.00 | 5,158.00 |
| 7 |  |
Crh Plc | +0.41% | +32.00 | 7,774.00 |
| 8 |  |
Hsbc Holdings Plc | +0.28% | +2.10 | 763.60 |
| 9 |  |
Pershing Square Holdings Ltd | +0.26% | +10.00 | 3,896.00 |
| 10 |  |
Lloyds Banking Group Plc | +0.25% | +0.14 | 55.52 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Bunzl Plc | -4.50% | -160.00 | 3,398.00 |
| 2 |  |
Aib Group Plc | -2.22% | -10.00 | 440.00 |
| 3 |  |
Antofagasta Plc | -2.15% | -36.00 | 1,637.50 |
| 4 |  |
Shell Plc | -1.75% | -43.00 | 2,415.50 |
| 5 |  |
Banco Santander S.a. | -1.67% | -6.50 | 382.00 |
| 6 |  |
Marks And Spencer Group Plc | -1.61% | -6.40 | 391.20 |
| 7 |  |
Coca-cola Europacific Partners Plc | -1.60% | -100.00 | 6,160.00 |
| 8 |  |
Bae Systems Plc | -1.59% | -19.00 | 1,178.00 |
| 9 |  |
Bt Group Plc | -1.50% | -2.25 | 147.40 |
| 10 |  |
Melrose Industries Plc | -1.43% | -7.80 | 538.00 |
US close: Tech sector lifts Nasdaq to new record, but Dow slump continues
US stocks put in a mixed performance on Monday ahead of this week’s Federal Reserve policy meeting, with the Dow falling for the eighth straight day and the Nasdaq surging to a new record high.
A strong performance in the tech sector lifted the Nasdaq 1.2% higher to 20,173.89, topping an earlier peak set last Wednesday. The index has now risen by nearly 37% so far this year.
In contrast, the ongoing slump on the Dow continued, falling 0.3% to 43,717.48. The index has now fallen nearly 3% since hitting a record on 4 December – marking its longest losing streak since 2018.
Meanwhile, the S&P 500 gained 0.4% to 6,074.08, and now sits just below record highs seen earlier this month.
This week’s primary focus will be the Federal Open Market Committee’s monetary policy meeting on Wednesday, with market participants widely expecting to see the central bank cut its benchmark overnight interest rate by a further 25 basis points.
“Wall Street’s optimism has sent indices higher with the CME’s FedWatch tool showing more than a 99% chance of a third cut from the Federal Reserve this year,” said Danni Hewson, AJ Bell’s head of financial analysis.
“But the devil in the US will be in the detail, with a lot riding on the Fed’s dot plot of forecasts which will, for the first time, factor in Donald Trump’s pledge of day one tariffs when he returns to the White House in January.”
On the macro front for Monday, the New York Empire State manufacturing index fell to 0.2 in December, according to the Federal Reserve Bank of New York, down from a three-year high of 31.2 in November and missing forecasts for a reading of 12. New orders and shipments increased modestly, while delivery times shortened slightly and supply availability was little changed.
Elsewhere, a preliminary reading of S&P Global’s manufacturing PMI fell to 48.3 in December, down from 49.7 in November and well below market expectations for a reading of 48.9, while the services PMI rose to 58.5, up from 56.1 a month earlier and beating expectations for a drop to 55.7.
Market movers
Unitedhealth shares continued to slump in the wake of the killing of Brian Thompson, the head of its insurance division. The stock fell 4%, having now dropped more than 18% since his death on 4 December.
Chip group Broadcom jumped 11% as the stock continued to be lifted by better-than-expected quarterly results on Friday. The share price has risen more than 38% over the past two days alone.
Other heavyweights in the tech sector were also in demand, including Tesla, Alphabet, Intel, Amazon.com and Intuit.
Bitcoin-related stocks jumped as the cryptocurrency continued to set new records, briefly topping the $107,000 mark earlier in the session. Coinbase, MARA Holdings and Robinhood were all in demand.
Tuesday newspaper round-up: Amazon, Lycamobile, Revolut
Thousands of workers at Amazon are threatening to strike at the company after giving the company a deadline of 15 December to agree to begin negotiating a first contract with the union representing employees. The strike threats, which started in New York, have now spread to Chicago and Atlanta. They come during Amazon’s peak holiday season and after the company experienced record sales during its 2024 Black Friday and Cyber Monday events. – Guardian
Almost 90% of the UK workforce at the telecoms company Lycamobile have been told they could lose their jobs, the Guardian has learned, in an announcement that leaves more than 300 staff fearing for their roles shortly before Christmas. The company, owned by the multimillionaire Tory donor and British-Sri Lankan businessman Allirajah Subaskaran, sells pay-as-you-go sim cards popular with low-paid workers wanting to make cheap phone calls to family overseas, as well as in the UK. – Guardian
Rachel Reeves may be forced to announce emergency tax rises in the spring if the economy continues to deteriorate, analysts have warned. Economists warned that a “quirk” in Ms Reeves’s new tax and spending rules meant she might be required to announce measures to balance the books in March. – Telegraph
Bill-payers face levies of up to £520 to pay for controversial carbon capture schemes under Ed Miliband’s plan for clean power. A string of projects backed by the Government are expected to cost £21.7bn over the next 25 years, including schemes that will store the emissions of new gas-fired power plants and some factories. – Telegraph
Eight years ago, hundreds of small investors took a long-odds bet on what was then a little-known financial technology company called Revolut — and now they have been turned into near millionaires after the rules were changed to allow them to crystallise some of their profits. Investors using the Crowdcube platform are due to have made 404 times their original investment when they sell a portion of their Revolut shares in the next few days. – The Times
