London midday: FTSE still firmer ahead of US inflation print

(Sharecast News) - London's markets remained relatively stable by midday on Tuesday, with the top-flight index still in the green after fresh jobs data showed a slowdown in wage growth. Investors were also awaiting a crucial US inflation reading and several central bank policy announcements scheduled for later in the week.

At midday, the FTSE 100 was up 0.4% at 7,575.37 points, while the FTSE 250 was down 0.09% at 18,734.32.

In currency markets, sterling was last up 0.09% on the dollar at $1.2566, while it faced a slight setback against the euro, declining 0.2% to €1.1641.

"European markets are enjoying a largely positive start to the day today, with the FTSE 100 gaining ground off the back of an eventful jobs report," said Scope Markets chief market analyst Joshua Mahony.

"Of particular note was the greater-than-expected slump in UK average earnings, with the total pay figure dropping from 8% to 7.2%.

"While this 0.8% decline helped raise hope that this period of wage normalisation might be hastened, the fact remains that UK earnings growth remains far too high as highlighted by the fact that only Argentina has a higher wage growth figure of all G20 nations."

Mahony said the substantial gap between earnings and inflation was helping to repair some of the damage done to UK households over the last year, with sky-high inflation having driven real wages lower to the detriment of spending and savings.

"While the claimant count pushed up into a five-month high, we remain within 'soft-landing' territory that should allow the Bank of England to continue squeezing most of the above-target inflation out of the economy before pivoting towards a more dovish policy stance."

Unemployment rate remains unchanged in October

In economic news, official data released earlier indicated that the number of unemployed people in the UK in October remained unchanged, coinciding with a cooling trend in wage growth.

According to the Office for National Statistics' latest provisional data, the unemployment rate held steady at 4.2% during the three months leading up to October.

Likewise, the economic inactivity rate remained essentially unchanged at 20.9%.

Annual growth in total pay registered at 7.2%, or 7.3% when excluding bonuses, marking a decline compared to the prior month's growth of 7.7% and falling short of analysts' expectations for 7.5% growth in regular pay.

Adjusted for inflation, annual total pay saw a 1.3% increase, while regular pay grew by 1.4%.

Furthermore, the number of job vacancies saw a decline of 45,000 in September, dropping to 949,000 for the period spanning from September to November.

That marked the 17th consecutive quarterly decrease in vacancies, constituting the longest unbroken run of such declines ever recorded.

In November, 30.2 million individuals were payrolled employees, reflecting a decrease of 13,000 compared to the revised figure for October.

"The pay data is clearly now moving in the right direction from the perspective of the Monetary Policy Committee," said Martin Beck, chief economic advisor to the EY Item Club.

"But given that annual pay growth is still running at more than twice the pace that would be consistent with the Bank of England's 2% inflation target, the MPC is likely to stick with its 'high-for-longer' message for a little while yet."

In Germany, a widely-watched survey revealed an uptick in investor sentiment despite the country's economic challenges.

The latest ZEW indicator of economic sentiment posted a reading of 12.8, a three-point increase from November's figure and surpassing consensus expectations for a reading of 8.8.

While the assessment of the current economic situation also improved by 2.7 points, it remained firmly in negative territory at -77.1.

AstraZeneca up on acquisition news, BT and Vodafone fall

On London's equity markets, AstraZeneca saw gains as it announced its agreement to acquire US vaccine maker Icosavax for up to $1.1bn.

The mining sector demonstrated resilience after facing substantial losses in the previous session.

Rio Tinto, Antofagasta, and Glencore all rebounded significantly, with their stock prices experiencing notable increases.

On the downside, Hargreaves Lansdown and AJ Bell were in the red after the Financial Conduct Authority (FCA) disclosed its concerns regarding how investment platforms and self-invested personal pension (SIPP) operators managed interest earned on customers' cash balances.

BT Group and Vodafone Group also found themselves on a downward trajectory following Ofcom's proposal to prohibit inflation-linked mid-contract price increases.

Reporting by Josh White for Sharecast.com.

FTSE 100 - Risers

Rio Tinto (RIO) 5,607.00p 2.24% Ocado Group (OCDO) 646.40p 2.21% Pershing Square Holdings Ltd NPV (PSH) 3,330.00p 2.15% Rightmove (RMV) 593.20p 1.99% Antofagasta (ANTO) 1,563.00p 1.76% AstraZeneca (AZN) 10,270.00p 1.72% Compass Group (CPG) 2,096.00p 1.50% InterContinental Hotels Group (IHG) 7,006.00p 1.36% Smith & Nephew (SN.) 1,061.00p 1.14% Legal & General Group (LGEN) 243.00p 1.12%

FTSE 100 - Fallers

Hargreaves Lansdown (HL.) 709.20p -7.32% BT Group (BT.A) 126.35p -3.81% Admiral Group (ADM) 2,725.00p -2.61% St James's Place (STJ) 679.00p -1.96% Vodafone Group (VOD) 67.22p -1.94% Anglo American (AAL) 1,761.20p -1.55% Prudential (PRU) 883.40p -1.47% Airtel Africa (AAF) 114.30p -1.30% Schroders (SDR) 418.60p -1.06% NATWEST GROUP (NWG) 217.20p -0.78%

FTSE 250 - Risers

International Distributions Services (IDS) 265.80p 9.74% TUI AG Reg Shs (DI) (TUI) 624.00p 2.97% Virgin Money UK (VMUK) 157.20p 2.68% SDCL Energy Efficiency Income Trust (SEIT) 60.70p 2.53% Spectris (SXS) 3,600.00p 2.45% Energean (ENOG) 1,012.00p 1.86% NCC Group (NCC) 123.20p 1.82% Spirent Communications (SPT) 113.50p 1.79% Darktrace (DARK) 367.50p 1.69% Games Workshop Group (GAW) 9,260.00p 1.48%

FTSE 250 - Fallers

AJ Bell (AJB) 287.40p -7.77% Abrdn (ABDN) 173.25p -4.28% Wizz Air Holdings (WIZZ) 1,967.00p -4.24% Digital 9 Infrastructure NPV (DGI9) 30.90p -4.04% Helios Towers (HTWS) 69.05p -3.83% Quilter (QLT) 97.00p -2.81% Pennon Group (PNN) 730.50p -2.66% Watches of Switzerland Group (WOSG) 698.00p -2.38% IP Group (IPO) 48.10p -2.24% Target Healthcare Reit Ltd (THRL) 81.00p -2.17%