London midday: Stocks steady after UK jobs data, ahead of US PPI

(Sharecast News) - London stocks were still steady by midday on Tuesday as investors mulled the latest UK jobs data and looked ahead to US inflation figures. The FTSE 100 was flat at 7,385.72, while the pound was 0.9% firmer against the dollar at 1.1866.

Data released earlier by the Office for National Statistics showed the unemployment rate ticked higher in September, while real wages continued to grow but lag inflation.

The unemployment rate edged up to 3.6% in the three months to September from 3.5% in August. Analysts had been expecting the rate to remain unchanged.

Meanwhile, regular pay increased 5.7% from a year earlier, up from 5.4% and ahead of expectations for a 5.5% rise.

Taking into account inflation, however, average pay including bonuses fell by 2.6% in the year to July to September. Excluding bonuses, it fell 2.7%.

The figures showed that the number of people in employment fell by 52,000 in the three months to September. This was much higher than consensus expectations for a 25,000 decline. They also revealed that an extra 133,000 people were classed as long-term sick, taking the total to 2.519m. Meanwhile, the share of economically inactive people - those neither in work nor looking for a job - rose 0.2 points to 21.6%.

Ashley Webb, UK economist at Capital Economics, said: "Overall, while today's release provided some tentative signs that the labour market is turning, the Bank of England will want to see concrete signs of easing wage growth.

"That's why we think the Bank of England will raise interest rates by 50 basis points in December and eventually to a peak of 5.00%, although the fiscal consolidation set to be announced on Thursday means the risks are on the downside."

Looking ahead to the rest of the day, investors were eyeing the US producer price index for October at 1330 GMT.

In equity markets, Ocado was the worst performer on the FTSE 100 after the Tempus column in The Times looked at the huge rally in the shares since it announced a deal with South Korean conglomerate Lotte and said it was a stock to avoid.

Vodafone slumped after the telecoms giant said annual earnings would come in at the lower end of guidance as it battled higher energy costs and inflation.

Land Securities fell after saying it swung to a first-half loss, with growth in earnings offset by market yield shift.

Discount retailer B&M European Value was weaker after a downgrade to 'hold' at Numis.

Aston Martin was the standout loser on the FTSE 250 after Jefferies downgraded the shares to 'underperform' from 'hold' as it said that recapitalisation risks remain after the rights issue.

Abrdn was also lower after a downgrade to 'underperform' at Exane.

Elsewhere, investment manager Ninety One fell as it reported a drop in interim profit, cut its dividend and struck a cautious note on the outlook.

On the upside, British Gas owner Centrica, Drax and SSE all rallied following a report that chancellor Jeremy Hunt is considering introducing a 40% windfall tax on the "excess returns" of electricity generators as part of this week's Autumn Statement.

It is understood the levy - which will be applied to excess returns produced above an as yet unspecified price per megawatt hour - would replace plans by former prime minister Liz Truss to cap the revenues of renewable energy producers.

With the threshold for the price for megawatt hour not yet know, shares in UK power generators jumped on the reports, on hopes that the oil and gas sector would bear the brunt of the government's package of windfall taxes.

BAE Systems rose after it held guidance as it said a weaker pound would provide a tailwind for reported annual earnings and sales.

Market Movers

FTSE 100 (UKX) 7,385.72 0.01% FTSE 250 (MCX) 19,498.50 -0.63% techMARK (TASX) 4,350.28 -0.41%

FTSE 100 - Risers

Centrica (CNA) 86.94p 4.17% BAE Systems (BA.) 749.80p 3.25% Harbour Energy (HBR) 349.10p 1.90% SSE (SSE) 1,659.00p 1.65% Relx plc (REL) 2,282.00p 1.51% Reckitt Benckiser Group (RKT) 5,748.00p 1.41% Haleon (HLN) 285.65p 1.35% Unilever (ULVR) 4,084.00p 1.28% Pearson (PSON) 963.80p 1.11% Glencore (GLEN) 516.90p 0.96%

FTSE 100 - Fallers

Ocado Group (OCDO) 820.20p -11.39% Vodafone Group (VOD) 97.16p -6.72% B&M European Value Retail S.A. (DI) (BME) 386.70p -4.12% Intermediate Capital Group (ICP) 1,203.50p -3.14% Next (NXT) 5,622.00p -2.70% Frasers Group (FRAS) 769.00p -2.60% Kingfisher (KGF) 243.20p -2.56% Rolls-Royce Holdings (RR.) 89.60p -2.18% Land Securities Group (LAND) 610.60p -2.12% Smith (DS) (SMDS) 310.60p -2.08%

FTSE 250 - Risers

Fidelity China Special Situations (FCSS) 220.00p 3.77% Ferrexpo (FXPO) 154.20p 3.77% Drax Group (DRX) 565.50p 3.29% Schroder Asia Pacific Fund (SDP) 512.00p 2.40% Templeton Emerging Markets Inv Trust (TEM) 147.80p 2.35% Schroder Oriental Income Fund Ltd. (SOI) 260.50p 2.16% Genuit Group (GEN) 327.00p 2.03% Energean (ENOG) 1,510.00p 1.96% HGCapital Trust (HGT) 376.00p 1.90% HarbourVest Global Private Equity Limited A Shs (HVPE) 2,430.00p 1.67%

FTSE 250 - Fallers

Aston Martin Lagonda Global Holdings (AML) 130.35p -8.88% Ninety One (N91) 206.60p -6.09% Wizz Air Holdings (WIZZ) 2,236.00p -5.53% Mitchells & Butlers (MAB) 140.70p -4.80% Abrdn (ABDN) 196.05p -4.32% ASOS (ASC) 763.00p -3.78% Jupiter Fund Management (JUP) 122.80p -3.69% Vietnam Enterprise Investments (DI) (VEIL) 505.00p -3.63% Dunelm Group (DNLM) 977.00p -3.36% 888 Holdings (DI) (888) 101.00p -3.35%