London open: FTSE edges higher ahead of payrolls

(Sharecast News) - London stocks edged higher in early trade on Wednesday as investors eyed the release of the latest US non-farm payrolls report. At 0820 GMT, the FTSE 100 was up 0.3% at 10,381.68.

The payrolls report had been scheduled for release last Friday but was delayed due to the partial US government shutdown.

Derren Nathan, head of equity research at Hargreaves Lansdown, said all eyes will be on the payrolls after Tuesday's disappointing US retail sales. "Forecasts are for an increase in hiring from 50,000 in December to 70,000 in January," he said.

"That's still a relatively light number, but anything lower could see markets gain more confidence in the scope for three rate cuts this year. Changes to the benchmark are also in play today, which are expected to see hiring rates for last year revised downwards."

Earlier, figures from the National Bureau of Statistics showed that China's consumer price inflation rose less than expected in January.

The consumer price index increased 0.2% on the year following a 0.8% jump in December, coming in below a forecast of 0.4%.

Food prices fell 0.7% on the year, down from 1.1% growth in December. Non-food inflation also slowed, down to 0.4% growth on the year in January from 0.8% a month earlier.

On the month, consumer prices were up 0.2%, versus expectations for a 0.3% rise.

Core CPI - which excludes food and energy - rose 0.8% on the year, down from 1.2% growth in December.

ING said the decline in food prices was well expected, as the Lunar New Year fell in late January for 2025, while it is mid-February for 2026.

"Overall, CPI inflation continued to rise at a decent 0.2% month-on-month pace, suggesting that overall we are still on track to see a general recovery of inflation in 2026 for now," said Lynn Song, chief economist for Greater China. "We hold our full year CPI inflation forecast at 0.9% YoY, with the key risks to the forecast being how policy rolls out domestically, and international price developments."

In equity markets, engineering firm Renishaw rallied after saying it expected higher full-year revenue and profit growth despite a mixed market outlook after interim earnings jumped 11.5% on an adjusted basis boosted by strong contributions from the defence and semi-conductor sectors.

The company said it expected ongoing strong demand across specific sectors and product lines offsetting more subdued conditions in general industrial markets. Adjusted pre-tax profit came in at £64.1m on the back of a 7.1% rise in revenue to £365.6m.

Imperial Leather maker PZ Cussons surged as it lifted its full-year profit guidance following a strong first-half performance. It now expects FY adjusted operating profit of between £53m and £57m, up from previous guidance of £50m to £55m.

LSEG surged following a report that activist hedge fund Elliott Management has built a "significant" stake in the company. According to the Financial Times, Elliott has been engaging with LSEG to help engineer an improvement in the group's performance.

Severn Trent gained as it said its financial performance in the period to 10 February was in line with expectations, with the group also on track to meet its environmental and operational targets.

Budget airline easyJet flew higher after an upgrade to 'buy' from 'neutral' at Citi.

On the downside, Barratt Redrow slumped as it reiterated full-year guidance despite subdued market conditions, following a "resilient" first half.

The housebuilder - which acquired rival Redrow 16 months ago - said it had delivered 7,444 total home completions in the 26 weeks to 28 December, a 4.7% increase on the same period a year previously. Adjusted operating profits were largely flat, dipping 0.3% to £210.2m.