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

(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%