London open: FTSE, sterling rise as investors mull jobs data

Opening Market Report
07:37, 17th May 2022

(Sharecast News) - London stocks rose in early trade on Tuesday, taking their cue from a positive session in Asia, as investors mulled the latest UK jobs data.
At 0900 BST, the FTSE 100 was up 0.5% at 7,502.39, but underperforming its European peers as sterling gained 0.8% against the dollar at 1.2423.

Figures released earlier by the Office for National Statistics showed the unemployment rate declined to a 48-year low in the first three months of the year, but wages were squeezed by surging inflation.

The unemployment rate fell from 3.8% in the previous quarter to 3.7% - its lowest level since 1974. Analysts had been expecting it to hold steady at 3.8%.

At the same time, total earnings growth rose to 7% in March from 5.6% in February, but regular earnings growth excluding bonuses only ticked up to 4.2% from 4.1%. Adjusted for prices, average earnings excluding bonuses fell by 1.9% from a year earlier, marking the biggest drop since 2013.

The figures also showed that the number of vacancies in February to April rose to a new record of 1,295,000, up 33,700 on the previous quarter and 499,300 compared to pre-pandemic levels in January to March 2020.

Victoria Scholar, head of investment at Interactive Investor, said: "This morning's figures point to a very tight UK labour market. Record high job vacancies, a falling unemployment rate and a reduction in the overall size of the labour market post-pandemic are giving workers more bargaining power to bid for higher wages and bonuses, prompting a 7% rise in average total pay, adding to the UK's inflationary conundrum as labour costs increase.

"The Bank of England governor Andrew Bailey said workers should 'think and reflect' before seeking a pay rise in comments that aim to stem spiralling wage inflation but fail to account for the cost-of-living crisis and the struggles that many families are facing."

In equity markets, Imperial Brands was the top performer on the FTSE 100 as it reported lower half-year operating profit after accounting for its exit from Russia in response to the invasion of Ukraine, but said it was on track to meet full-year guidance.

Power generation firm ContourGlobal surged to the top of the FTSE 250 after it agreed to be bought by private equity group KKR for £1.75bn.

Sales, marketing and support services group DCC rallied as its full-year operating profit beat expectations.

Drinks group C&C - which owns Bulmers and Magners cider, among others - fizzed higher after saying it swung to a full-year profit as Covid restrictions eased.

On the downside, Unilever was weaker after a double downgrade to 'sell' at Societe Generale.

Vodafone fell after the mobile telecoms group posted a 5% rise in annual profits as its German operations performed strongly, but warned that inflation was likely to hit current-year figures.

TI Fluid Systems slumped as it reported a decline in first-quarter revenues and volumes, pointing to supply chain disruptions.

Market Movers

FTSE 100 (UKX) 7,502.39 0.50%
FTSE 250 (MCX) 20,050.09 0.63%
techMARK (TASX) 4,327.93 0.00%

FTSE 100 - Risers

Imperial Brands (IMB) 1,824.00p 5.87%
DCC (CDI) (DCC) 6,466.00p 2.52%
Entain (ENT) 1,398.00p 2.34%
Airtel Africa (AAF) 142.30p 2.15%
Barclays (BARC) 154.58p 2.06%
Mondi (MNDI) 1,561.00p 2.02%
Fresnillo (FRES) 773.20p 2.01%
BP (BP.) 425.75p 2.00%
Harbour Energy (HBR) 465.60p 1.97%
Prudential (PRU) 991.80p 1.95%

FTSE 100 - Fallers

Sage Group (SGE) 667.60p -1.65%
Unilever (ULVR) 3,673.50p -1.65%
Vodafone Group (VOD) 118.26p -1.48%
Halma (HLMA) 2,165.00p -1.10%
Hikma Pharmaceuticals (HIK) 1,704.00p -0.67%
Reckitt Benckiser Group (RKT) 6,386.00p -0.59%
Rentokil Initial (RTO) 514.40p -0.58%
SEGRO (SGRO) 1,114.50p -0.58%
Pershing Square Holdings Ltd NPV (PSH) 2,580.00p -0.58%
Next (NXT) 6,504.00p -0.43%

FTSE 250 - Risers

Contour Global (GLO) 258.50p 33.92%
C&C Group (CDI) (CCR) 218.00p 6.34%
Petershill Partners (PHLL) 233.50p 4.50%
Tullow Oil (TLW) 55.90p 4.19%
Aston Martin Lagonda Global Holdings (AML) 719.80p 3.76%
Fidelity China Special Situations (FCSS) 239.00p 3.69%
Edinburgh Worldwide Inv Trust (EWI) 181.00p 2.96%
Bridgepoint Group (Reg S) (BPT) 282.40p 2.92%
Centrica (CNA) 81.46p 2.81%
Bellevue Healthcare Trust (Red) (BBH) 156.60p 2.76%

FTSE 250 - Fallers

TI Fluid Systems (TIFS) 165.80p -11.91%
Polymetal International (POLY) 248.70p -2.51%
Playtech (PTEC) 517.00p -2.26%
Baltic Classifieds Group (BCG) 145.20p -2.16%
Tritax Eurobox (GBP) (EBOX) 95.80p -1.13%
Big Yellow Group (BYG) 1,249.00p -0.80%
Unite Group (UTG) 1,050.00p -0.76%
LondonMetric Property (LMP) 245.60p -0.73%
Monks Inv Trust (MNKS) 959.00p -0.72%
LXI Reit (LXI) 144.40p -0.69%

Disclaimer & Declaration of Interest

The information, investment views and recommendations in this article are provided for general information purposes only. Nothing in this article should be construed as a solicitation to buy or sell any financial product relating to any companies under discussion or to engage in or refrain from doing so or engaging in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the writer but no responsibility is accepted for actions based on such opinions or comments. Vox Markets may receive payment from companies mentioned for enhanced profiling or publication presence. The writer may or may not hold investments in the companies under discussion.

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