London midday: Stocks fall as UK wage growth slows, oil prices decline

London stocks were in the red on Wednesday as data showed UK wage growth slowed more than expected and as oil prices hit new lows.

UK weekly earnings rose 2% in the three months to November, easing from the 2.4% growth registered in the previous quarter, the Office for National Statistics revealed. Analysts had been expecting a 2.1% gain.

“Today’s UK labour market figures showed a further slowdown in wage growth, suggesting that an interest rate hike is still some way off,” said Ruth Miller, UK economist at Capital Economics.

Nevertheless, the labour market improved, with the unemployment rate falling unexpectedly to 5.1% in three-month period from 5.2% the prior quarter. UK employers added 267,000 jobs during the period, compared to analysts’ forecasts of 235,000 and a previous 207,000.

The claimant count rate held steady at 2.3% in December, as expected. Jobless claims last month fell 4,300, beating forecasts for a 2,800 increase, following a 2,200 drop in November.

Elsewhere, Japan’s Nikkei index closed in a bear market and other Asian stocks declined amid the slide in oil prices and concerns about China’s economic slowdown. Gross domestic product unexpectedly fell to 6.8% in the fourth quarter from 6.9% previously, official data showed on Tuesday.

Brent crude fell 2.3% to $28.11 per barrel and West Texas Intermediate dropped 2.7% to $28.78 per barrel at 1147 GMT. The International Energy Agency on Tuesday warned that oil prices will likely slide further this year as the market contends with an oversupply of production following the lifting of Iran sanctions.

“Since the beginning of this year equity markets have not only spun their wheels, they have lost any semblance of positive traction as continued concerns of oversupply in the oil and gas market set against a backdrop of slowing global growth has seen stock markets across the globe slip back into bear market territory,” said Michael Hewson, chief market analyst at CMC Markets.

Still to come, US inflation figures are due at 1330 GMT along with housing starts figures.

In company news, WH Smith jumped after saying sales from its shops at airports and train stations were up 5% in the 20 weeks to 16 January although High Street sales were flat over the period.

JD Wetherspoons plunged after saying operating margins would fall in the first 12 weeks of the second quarter compared to the same period last year due to increased labour costs. Chairman Tim Martin warned that his current view was that profits for this year were "likely to be towards the lower end of analysts' expectations".

Pets at Home rose after posting slightly better-than-expected sales for the third quarter, along with a rise in total revenue growth.

Anglo American dropped after agreeing to sell its 100% interest in the Callide thermal coal mine in Queensland, Australia, to Batchfire Resources for an undisclosed sum.

BHP Billiton was lower after saying iron ore production is expected to be reduced by 10m tonnes due to the dam disaster at Brazil's Samarco.

Royal Dutch Shell slumped as oil prices fell and as it released a trading update saying capital investment last year was expected to be 20% lower at $29bn as a result of efficiency improvements and more selectivity on new investments.

Market Movers

FTSE 100 (UKX) 5,709.18 -2.85%
FTSE 250 (MCX) 15,716.29 -2.47%
techMARK (TASX) 3,012.70 -2.45%

FTSE 100 - Risers

Randgold Resources Ltd. (RRS) 4,365.00p 2.27%
Sports Direct International (SPD) 394.10p -0.18%
SABMiller (SAB) 4,123.50p -0.35%
United Utilities Group (UU.) 907.50p -1.41%
SSE (SSE) 1,402.00p -1.48%
3i Group (III) 425.00p -1.48%
National Grid (NG.) 930.60p -1.51%
Taylor Wimpey (TW.) 182.00p -1.52%
Intertek Group (ITRK) 2,681.00p -1.61%
British Land Company (BLND) 702.50p -1.75%

FTSE 100 - Fallers

BHP Billiton (BLT) 585.40p -6.65%
Anglo American (AAL) 224.20p -6.11%
Royal Dutch Shell 'A' (RDSA) 1,289.00p -5.57%
Royal Dutch Shell 'B' (RDSB) 1,294.00p -5.51%
Prudential (PRU) 1,318.00p -5.35%
St James's Place (STJ) 876.00p -5.30%
Glencore (GLEN) 74.90p -5.17%
Old Mutual (OML) 150.50p -4.51%
Aberdeen Asset Management (ADN) 218.50p -4.29%
London Stock Exchange Group (LSE) 2,368.00p -4.25%

FTSE 250 - Risers

WH Smith (SMWH) 1,724.00p 8.56%
Allied Minds (ALM) 300.90p 5.54%
Pets at Home Group (PETS) 241.80p 3.69%
Hastings Group Holdings (HSTG) 158.80p 1.02%
Ocado Group (OCDO) 261.10p 0.77%
John Laing Infrastructure Fund Ltd (JLIF) 117.00p 0.43%
HICL Infrastructure Company Ltd (HICL) 151.80p 0.20%
GCP Infrastructure Investments Ltd (GCP) 117.90p 0.08%
International Public Partnerships Ltd. (INPP) 139.20p 0.00%
Debenhams (DEB) 76.35p 0.00%

FTSE 250 - Fallers

OneSavings Bank (OSB) 288.00p -7.99%
Wetherspoon (J.D.) (JDW) 622.50p -7.71%
Nostrum Oil & Gas (NOG) 303.40p -7.27%
Tullow Oil (TLW) 119.00p -7.03%
Amec Foster Wheeler (AMFW) 356.00p -6.68%
Home Retail Group (HOME) 139.20p -6.58%
Jardine Lloyd Thompson Group (JLT) 799.00p -6.44%
Genus (GNS) 1,309.00p -5.69%
Keller Group (KLR) 750.00p -5.66%
Greggs (GRG) 954.00p -5.64%