London pre-open: Stocks seen muted as investors eye US inflation

(Sharecast News) - London stocks were set for a muted open on Tuesday as investors eyed the latest UK jobs data and looked ahead to the release of US inflation figures. The FTSE 100 was called to open just four points higher at 7,951.

CMC Markets analyst Michael Hewson said: "Asia markets have had a mixed session after the Japanese government nominated Kazuo Ueda as the next Bank of Japan governor, when Kuroda leaves in April, with the Japanese yen edging a little higher, as speculation continues as to whether he will be more hawkish than his predecessor. European markets look set to open unchanged.

"Today's report is expected to act as an important indicator as to how many more 25bps rate hikes might be in the pipeline as the Fed looks to push inflation back to its 2% target."

On home shores, data from the Office for National Statistics showed that 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. Taking into account inflation, however, this marked a 2.5% decline.

Capital Economics said: "December's labour market data showed that, despite an easing in labour demand, labour market conditions stayed tight and the market continues to support strong wage growth.

"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 corporate news, Liberty Global purchased a stake in rival Vodafone in what market observers described as an opportunistic bid - but ruled out a possible offer.

Liberty's chief executive officer, Mike Fries, reportedly said that the current share price did not reflect "the underlying long-term value of [Vodafone's] operating businesses, or their announced consolidation and infrastructure opportunities."

The 4.9% stake in Vodafone was financed through roughly £225m of equity funding.

Holiday operator TUI 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.

The company reported an underlying operating loss of €153.0m compared with a loss of €273.6m with "encouraging" booking momentum across both winter and summer seasons.

Elsewhere, Plus 500 posted a 16% jump in full-year revenues to $832.6m, for a 17% increase in earnings before interest, taxes, depreciation and amortisation to $453m, as its operating profit margin widened from 54% to 55%.

In turn, the fintech group reported a 24% rise in its cash on hand at period end to reach $930.2m. Among its performance highlights were record annual revenues per user and a near doubling in the size of the average deposit per active customer to roughly $8,000. The firm also announced a further $100m of shareholder returns, taking the yearly total to $270m.

Coca-Cola HBC, a bottling partner of the US-based Coca-Cola Company, reported strong results for 2022, with organic revenue up 14.2%.

Excluding Russia and Ukraine, organic revenue was ahead 22.7%. The firm said its comparable EBIT increased by 11.9% to €929.7m (£821.89m) with organic EBIT up 1.3%, while full-year free cash flow increased by €43.8m to €645.1m. It announced a 9.9% increase in its ordinary dividend, to 78 euro cents per share.