London midday: Stocks fall as investors weigh earnings, UK jobs data

London stocks declined after disappointing earnings and as official data showed UK job creation slowed in the three months to August.

Travis Perkins was the top faller on the FTSE 100 after the housebuilder reported market conditions have worsened and it has decided to close more than 40 sites and launch a cost-cutting programme.

The group said that while its consumer, contracts and general merchanting businesses had outperformed the market, with total sales growing 3.4% in the three-months to the end of September and like-for-like (LFL) growth of 2.0%, its full year profits were likely to disappoint.

Reckitt Benckiser was also on the back foot as the health, hygiene and home products manufacturer saw sales growth slow in the third quarter as it was impacted by ongoing legal issues in South Korea and low demand in Russia.

The company reported 2% like-for-like (LFL) sales growth in the third quarter, down from 5% in the first half, although total growth increased a whopping 17% due foreign exchange rate movements.

On the upside, housebuilders Persimmon, Barratt Developments and Taylor Wimpey gained after Barclays said UK house prices are expected to be more “resilient” despite Brexit.

International Consolidated Airlines was given a boost as Credit Suisse raised its rating on the stock to ‘outperform’ from ‘neutral’ and lifted its target price to 469p from 439p

On the data front, the Office for National Statistics said the number of people in work rose by 106,000 between June and August, down from gains of more than 170,000 in the previous three readings. Analysts had expected a 70,000 increase in extra jobs.

The unemployment rate remained at 4.9%, as expected. However, the number of people out of work rose by 10,000, the first rise since the three months to February.

Average weekly earnings increased 2.3%, also as forecast, following upwardly revised 2.4% growth in the prior period.

In September, jobless claims rose less than expected, up 700 compared to estimates of 3,200.

“We suspect both the economy and the labour market will be increasingly pressurized by mounting uncertainties over the coming months - particularly once the government triggers Article 50 (due by end-March) and likely very difficult negotiations with the EU come increasingly to the forefront,” said Howard Archer, chief UK and European economist at IHS Global Insights.

“We also expect growth to slow as consumer purchasing power is increasingly squeezed.”

Elsewhere, China industrial production rose 6.1% in September from a year ago, less than the 6.4% increase expected and after a 6.3% gain in August. Retail sales in the nation edged up 10.7% year-on-year in September, as expected, following a 10.6% rise a month earlier.

China’s gross domestic product steadied at 6.7% growth in the third quarter, in line with expectations.

“The official GDP figures remain too stable to tell us much about the performance of China’s economy,” according to Julian Evans-Pritchard, China economist at Capital Economics.

“Our own measure of economic activity suggests that growth actually picked up in the third quarter. But with credit growth now slowing and policymakers moving to rein in surging property prices, this recovery is unlikely to last for more than another quarter or two.”

Meanwhile, oil prices gained after OPEC said its cartel is committed to implementing a plan to limit production when it meets in November.

Brent crude rose 1.3% to $52.39 per barrel and West Texas Intermediate jumped 1.5% to $51.06 per barrel at 1143 BST.

Traders will be eyeing the Energy Information Administration’s weekly US crude inventories report at 1530 BST.

Market Movers

FTSE 100 (UKX) 6,992.32 -0.11%
FTSE 250 (MCX) 17,932.74 -0.34%
techMARK (TASX) 3,521.63 -0.43%

FTSE 100 - Risers

Capita (CPI) 620.00p 2.82%
Persimmon (PSN) 1,761.00p 2.32%
Taylor Wimpey (TW.) 149.70p 2.04%
Randgold Resources Ltd. (RRS) 7,100.00p 2.01%
International Consolidated Airlines Group SA (CDI) (IAG) 394.00p 1.89%
Burberry Group (BRBY) 1,428.00p 1.78%
Barclays (BARC) 176.95p 1.70%
Fresnillo (FRES) 1,662.00p 1.65%
InterContinental Hotels Group (IHG) 3,282.00p 1.58%
Barratt Developments (BDEV) 490.90p 1.47%

FTSE 100 - Fallers

Travis Perkins (TPK) 1,380.00p -7.26%
Reckitt Benckiser Group (RB.) 7,135.00p -2.62%
Wolseley (WOS) 4,460.00p -1.37%
Provident Financial (PFG) 2,980.00p -1.26%
Vodafone Group (VOD) 223.40p -1.22%
BT Group (BT.A) 380.00p -1.21%
Aviva (AV.) 435.10p -1.14%
CRH (CRH) 2,686.00p -1.10%
Schroders (SDR) 2,786.00p -1.10%
Legal & General Group (LGEN) 207.90p -1.00%

FTSE 250 - Risers

Computacenter (CCC) 752.50p 6.66%
Crest Nicholson Holdings (CRST) 425.70p 4.36%
Bellway (BWY) 2,486.00p 4.19%
Cineworld Group (CINE) 579.00p 4.14%
Rentokil Initial (RTO) 233.30p 3.50%
Wizz Air Holdings (WIZZ) 1,530.00p 3.45%
Euromoney Institutional Investor (ERM) 990.50p 3.12%
Greencore Group (GNC) 314.90p 2.98%
Acacia Mining (ACA) 473.70p 2.75%
Countrywide (CWD) 203.70p 2.57%

FTSE 250 - Fallers

Laird (LRD) 169.70p -44.99%
SIG (SHI) 112.10p -4.11%
Brown (N.) Group (BWNG) 187.50p -3.35%
AO World (AO.) 176.30p -3.34%
Auto Trader Group (AUTO) 369.30p -3.32%
IP Group (IPO) 143.60p -2.64%
Polypipe Group (PLP) 261.00p -2.54%
JRP Group (JRP) 129.70p -2.48%
Grafton Group Units (GFTU) 510.50p -2.39%
PayPoint (PAY) 1,071.00p -2.37%