London open: Stocks edge up as investors mull UK jobs data

(Sharecast News) - London stocks edged higher in early trade on Tuesday as investors mulled the latest UK jobs report and some disappointing data out of China. At 0855 BST, the FTSE 100 was up 0.2% at 7,793.02.

Data out earlier showed that Chinese industrial production and retail sales both grew less than forecast in April, fuelling worries that the post-Covid rebound expected to drive the global economic rebound was running out of steam.

Industrial production grew 5.6% in April, well below forecasts of a 10.6% increase. Retail sales were 18.4% higher year-on-year, missing forecasts of 21% growth.

On home shores, figures released by the Office for National Statistics showed that the unemployment rate rose to 3.9% in the three months to March from 3.8% a month earlier, versus expectations for it to be unchanged. The increase was largely driven by people unemployed for over 12 months.

In February to April, the number of vacancies is estimated to have fallen by 55,000 on the quarter to 1.083m. The ONS noted that vacancies fell for the 10th consecutive period, reflecting "uncertainty across industries, as survey respondents continue to cite economic pressures as a factor in holding back on recruitment".

The data also showed that growth in average total pay including bonuses was 5.8% and growth in regular pay excluding bonuses was 6.7% in January to March. Adjusted for inflation, however, growth in total and regular pay fell on the year, by 3% and 2%, respectively.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: "China's pandemic snap back is losing elasticity, adding to worries about growth unravelling across the global economy.

"Concerns are also rising that not enough progress is being made to avoid a US default, which would send shockwaves through financial markets. Talks among political leaders to extend the debt ceiling are set to start, but expectations of an immediate breakthrough are low, with Republican House of Representatives Speaker Kevin McCarthy outlining his concerns that big issues are still not close to being resolved. As the clock ticks down, volatility on markets is expected to tick up."

In equity markets, Smiths Group was boosted by a double upgrade to 'buy' at Bank of America Merrill Lynch, while Primark owner AB Foods was higher after an upgrade to 'outperform' from 'sector perform' at RBC Capital Markets.

Britvic fizzed higher as the drinks company posted a rise in interim profits and revenue and lifted its dividend, as it noted strong demand and standout performances from Tango and Pepsi MAX. It also hailed an "excellent" start to the year.

On the downside, telecoms giant Vodafone slid as it said it expects to post flat earnings next year after reporting a decline in annual profits in a performance described as "not good enough" by its chief executive, who also announced 11,000 job cuts as part of a radical overhaul of the business.

Animal genetics company Genus tumbled as it cut its full-year profit outlook, pointing to "very challenging" market conditions in the porcine business in China.

Market Movers

FTSE 100 (UKX) 7,793.02 0.20% FTSE 250 (MCX) 19,283.74 0.13% techMARK (TASX) 4,717.36 -0.22%

FTSE 100 - Risers

Rolls-Royce Holdings (RR.) 149.80p 3.24% 3i Group (III) 1,912.50p 1.95% Smiths Group (SMIN) 1,684.50p 1.72% Melrose Industries (MRO) 471.70p 1.59% Compass Group (CPG) 2,196.00p 1.34% Centrica (CNA) 119.10p 1.32% Persimmon (PSN) 1,353.00p 1.23% Land Securities Group (LAND) 627.60p 1.23% Associated British Foods (ABF) 1,927.50p 1.15% Halma (HLMA) 2,487.00p 1.10%

FTSE 100 - Fallers

Vodafone Group (VOD) 87.09p -3.27% Prudential (PRU) 1,150.50p -1.75% Kingfisher (KGF) 247.00p -1.16% Frasers Group (FRAS) 773.00p -0.96% Ocado Group (OCDO) 426.90p -0.95% Anglo American (AAL) 2,363.50p -0.69% Admiral Group (ADM) 2,232.00p -0.67% WPP (WPP) 888.80p -0.51% BT Group (BT.A) 153.00p -0.49% Endeavour Mining (EDV) 2,066.00p -0.48%

FTSE 250 - Risers

ASOS (ASC) 414.80p 3.57% TUI AG Reg Shs (DI) (TUI) 543.00p 3.23% International Distributions Services (IDS) 233.70p 2.32% Vesuvius (VSVS) 411.40p 2.14% Morgan Advanced Materials (MGAM) 291.00p 1.57% TBC Bank Group (TBCG) 2,420.00p 1.47% Tritax Eurobox (GBP) (EBOX) 68.20p 1.34% Britvic (BVIC) 940.00p 1.24% Liontrust Asset Management (LIO) 800.00p 1.20% Auction Technology Group (ATG) 678.00p 1.19%

FTSE 250 - Fallers

Genus (GNS) 2,388.00p -7.01% FDM Group (Holdings) (FDM) 617.00p -5.37% Wood Group (John) (WG.) 139.60p -2.79% Capricorn Energy (CNE) 212.10p -2.35% Baltic Classifieds Group (BCG) 153.00p -2.17% Ithaca Energy (ITH) 157.60p -2.11% Fidelity China Special Situations (FCSS) 226.50p -1.52% Watches of Switzerland Group (WOSG) 750.00p -1.32% Greggs (GRG) 2,808.00p -1.27% Temple Bar Inv Trust (TMPL) 227.50p -1.09%