London close: Miners lead gains on reports of new stimulus in the works in China
London stocks edged higher on Tuesday, with miners pacing gains on reports of further fiscal stimulus being planned in China and despite sterling moving a touch higher following upbeat UK labour data for April.
The FTSE 100 was up 0.31% at 7,398.45 by the end of trading, while the pound was 0.3% firmer against the US dollar and the euro at 1.2725 and 1.1244, respectively, perking up following the release of a better-than-expected jobs report.
Spreadex analyst Connor Campbell said: "Including bonuses wage growth came in at 3.1%, beating estimates of 2.9%, with the previous month’s reading revised up to 3.3%. Strip away bonuses and the picture was even rosier, rising from 3.3% to 3.4% month-on-month.
"The unemployment rate, meanwhile, held at a 44-year low of 3.8%. The one blemish in the jobs report was an unexpected jump in the claimant count change, almost double what was forecast at 23.2k."
The figures were a welcome relief after Tuesday's disappointing GDP data, which showed that the UK economy contracted 0.4% in April as car production slumped.
But in responses to the Treasury Select Committee, on Tuesday the Bank of England's Michael Saunders and Ben Broadbent underlined the risks to the economy from a so-called no-deal Brexit.
More broadly, investors continued to eye trade developments after US President Trump reiterated his threat to impose tariffs on an additional $300bn of Chinese goods. Trump said on Monday evening that he will raise tariffs if China's leader Xi Jinping doesn't meet him at the G20 leaders' summit planned for 28-29 June in Fukuoka, Japan.
Neil Wilson, chief market analyst at Markets.com said the market’s going to remain sensitive to trade news flow for some time, particularly as we head into the G20. "We’d assume there will be a meeting but cordial it may not be," he said.
On a more constructive note, on Tuesday US Secretary Wilbur Ross told broadcaster CNBC: "Eventually, this will end in negotiation. Even shooting wars end in negotiations."
Ross reportedly also warned against expecting a deal to come out of the G-20, at best they would lay the groundwork for an eventual agreement, he said.
For his part, Chinese foreign ministry spokesman Geng Shuang reponded to the US President, saying that "China does not want to fight a trade war, but we are not afraid of fighting a trade war."
In equity markets, miners were the standout gainers, with Antofagasta, Anglo American, BHP and Glencore all up amid rising copper and iron ore prices. The sector - and the overall tone in financial markets - was underpinned by reports that Beijing might be readying higher government spending.
Safety, health and environment technology company Halma was up as it posted record full-year results thanks to strong growth across all four of its divisions.
An early rally in shares of over-50s specialist Saga, after announcing a savings partnership with Goldman Sachs's savings arm, Marcus, petered out.
On the downside, Ted Baker shares tumbled after the fashion retailer warned on profits amid "extremely difficult trading conditions". The company said pre-tax profit for the year to January 2020 are now expected to come in between £50m and £60m versus consensus of around £70m.
Compass Group fell as it agreed to buy Nordic food catering business Fazer Food Services for around €475m.
Bellway retreated even as the housebuilder said full-year earnings growth would be in line with expectations, adding that costs were under control, helping to ease gross margin pressures.
Market Movers
FTSE 100 (UKX) 7,398.45 0.31%
FTSE 250 (MCX) 19,325.72 0.08%
techMARK (TASX) 3,600.28 0.29%
FTSE 100 - Risers
Halma (HLMA) 1,981.50p 4.10%
Just Eat (JE.) 619.60p 3.96%
NMC Health (NMC) 2,350.00p 3.75%
Smith (DS) (SMDS) 343.90p 3.43%
Antofagasta (ANTO) 859.00p 2.95%
Anglo American (AAL) 2,057.50p 2.44%
Rio Tinto (RIO) 4,696.50p 2.39%
BHP Group (BHP) 1,894.20p 2.28%
Glencore (GLEN) 271.35p 2.25%
Hikma Pharmaceuticals (HIK) 1,649.00p 2.20%
FTSE 100 - Fallers
Centrica (CNA) 93.88p -1.84%
Hargreaves Lansdown (HL.) 1,873.50p -1.80%
Tesco (TSCO) 227.90p -1.26%
Scottish Mortgage Inv Trust (SMT) 516.00p -1.05%
Morrison (Wm) Supermarkets (MRW) 195.95p -0.86%
Rightmove (RMV) 580.00p -0.85%
United Utilities Group (UU.) 816.00p -0.85%
Standard Chartered (STAN) 701.60p -0.79%
Marks & Spencer Group (MKS) 219.30p -0.73%
Experian (EXPN) 2,388.00p -0.71%
FTSE 250 - Risers
Woodford Patient Capital Trust (WPCT) 63.40p 7.46%
Kaz Minerals (KAZ) 574.20p 6.57%
Aston Martin Lagonda Global Holdings (AML) 1,079.00p 5.47%
Kier Group (KIE) 168.30p 4.47%
Games Workshop Group (GAW) 4,946.00p 4.13%
Weir Group (WEIR) 1,566.00p 3.57%
Spirent Communications (SPT) 156.60p 3.03%
Stobart Group Ltd. (STOB) 106.60p 2.90%
IP Group (IPO) 75.00p 2.74%
Synthomer (SYNT) 368.80p 2.44%
FTSE 250 - Fallers
Ted Baker (TED) 955.00p -29.05%
Funding Circle Holdings (FCH) 234.50p -9.63%
Entertainment One Limited (ETO) 375.20p -4.92%
Stagecoach Group (SGC) 125.10p -4.58%
Just Group (JUST) 49.30p -4.27%
Provident Financial (PFG) 501.00p -3.77%
Metro Bank (MTRO) 603.00p -3.75%
McCarthy & Stone (MCS) 133.20p -3.27%
Saga (SAGA) 40.02p -2.77%
Capita (CPI) 105.15p -2.50%