London midday: FTSE maintains gains ahead of US inflation data

(Sharecast News) - London stocks were still in the black by midday on Tuesday as investors mulled the latest UK jobs numbers and looked ahead to the release of US inflation figures. The FTSE 100 was 0.4% firmer at 7,981.73, nearing the 8,000 mark, having hit a fresh record high earlier in the session.

Russ Mould, investment director at AJ Bell, said: "It might be stretching things to say love is in the air when it comes to the stock market, but the FTSE 100 is mounting a Valentine's Day push toward the 8,000 level.

"All eyes will be fixed on Washington later as the US Bureau of Labor Statistics posts inflation numbers for January.

"The expectation is for another modest easing of inflationary pressures and anything more than this could provide a real boost to sentiment - though conversely a renewed move higher in the inflation rate could prompt heavy selling.

"In the UK record wage growth raised concerns the UK's own inflation problems might prove stickier than feared ahead of the UK posting its own CPI numbers on Wednesday.

"However, the Bank of England will likely be hoping the lagged impact of a series of rate increases is yet to fully come through amid growing expectations a rate hike in March will be the last."

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: "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 advanced after Liberty Global bought a 4.9% stake in the company.

EasyJet flew higher after an upgrade to 'buy' from 'sell' at Deutsche Bank. Wizz Air was also up.

Plus 500 ticked 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.

Market Movers

FTSE 100 (UKX) 7,981.73 0.43% FTSE 250 (MCX) 20,211.62 0.43% techMARK (TASX) 4,600.26 0.73%

FTSE 100 - Risers

Coca-Cola HBC AG (CDI) (CCH) 2,055.00p 5.85% BT Group (BT.A) 140.00p 4.40% Vodafone Group (VOD) 97.45p 3.67% Pearson (PSON) 932.40p 2.89% Hargreaves Lansdown (HL.) 958.80p 2.46% Centrica (CNA) 100.30p 2.41% Airtel Africa (AAF) 126.40p 2.10% Taylor Wimpey (TW.) 120.20p 1.78% Persimmon (PSN) 1,460.00p 1.67% WPP (WPP) 999.00p 1.57%

FTSE 100 - Fallers

Entain (ENT) 1,310.50p -1.39% Rolls-Royce Holdings (RR.) 108.08p -1.26% HSBC Holdings (HSBA) 608.10p -0.91% Melrose Industries (MRO) 141.35p -0.84% JD Sports Fashion (JD.) 179.90p -0.58% Standard Chartered (STAN) 725.60p -0.58% Antofagasta (ANTO) 1,703.50p -0.50% Ocado Group (OCDO) 616.00p -0.42% Admiral Group (ADM) 2,225.00p -0.40% Haleon (HLN) 330.35p -0.39%

FTSE 250 - Risers

Darktrace (DARK) 259.80p 4.51% easyJet (EZJ) 491.20p 4.47% Aston Martin Lagonda Global Holdings (AML) 194.30p 3.52% Drax Group (DRX) 647.00p 3.19% Crest Nicholson Holdings (CRST) 240.40p 2.65% Wizz Air Holdings (WIZZ) 2,805.00p 2.60% Wetherspoon (J.D.) (JDW) 523.00p 2.35% Bellway (BWY) 2,197.00p 2.23% TUI AG Reg Shs (DI) (TUI) 174.90p 2.16% Vistry Group (VTY) 776.50p 2.10%

FTSE 250 - Fallers

PureTech Health (PRTC) 231.00p -2.74% Bakkavor Group (BAKK) 110.00p -2.65% Tullow Oil (TLW) 34.50p -2.04% Bank of Georgia Group (BGEO) 2,675.00p -1.47% Fidelity China Special Situations (FCSS) 275.00p -1.43% Worldwide Healthcare Trust (WWH) 3,185.00p -1.39% C&C Group (CDI) (CCR) 157.30p -1.38% Pacific Horizon Inv Trust (PHI) 661.00p -1.34% Essentra (ESNT) 232.00p -1.28% Derwent London (DLN) 2,678.00p -1.03%