London midday: Stocks lower as investors mull jobs data; Ocado slides
London stocks were still a little lower by midday on Tuesday as the latest UK jobs data showed that wages grew at their fastest pace in more than 20 years in the three months to November, adding pressure on the Bank of England to hike rates.
The FTSE 100 was down 0.2% at 7,841.50.
Figures released earlier by the Office for National Statistics showed that regular pay, excluding bonuses, was up 6.4% on an annual basis. Excluding the Covid pandemic, this marks the biggest jump since records began in 2001.
Adjusted for inflation, however, wages were down 2.6%.
The figures also showed that the unemployment rate ticked up to 3.7% in the three months to November, from 3.5% in the previous quarter.
In addition, the number of job vacancies declined by 75,000 in October to December versus the previous three months.
Ashley Webb, UK economist at Capital Economics, said: "Consistent with the economy proving to be more resilient than expected, November’s labour market data show that conditions remain tight and wage growth stayed strong.
"This will only add further weight to the case for the Bank of England to raise interest rates from 3.50% now, perhaps to 4.50% in the coming months."
Also weighing on the mood was the release of data showing that China’s economy slowed in 2022 to one of its worst levels in nearly 50 years.
In equity markets, Ocado tumbled after it said that fourth-quarter sales at Ocado Retail - its 50:50 joint venture with Marks & Spencer - were more or less flat as customers shopped less and bought fewer items.
Retail revenues nudged up just 0.3% versus the same quarter a year earlier, coming in below the company’s guidance for mid-single digit sales growth.
Russ Mould, investment director at AJ Bell, said: "A 2023 recovery in the shares of online groceries firm Ocado was snuffed out after the company reported sales growth which was dwarfed by inflation and by the performance of traditional supermarkets and offered an uninspiring forecast for the rest of the year.
"While Ocado is winning new customers, people are buying less. This has an outsized impact on online deliveries which cost roughly the same to make whether the order is two potatoes and a block of cheese or a full weekly shop.
"Even with tiered charging based on how much you order, shrinking basket sizes are still likely to have a material impact on margins. Ocado is also at a premium price point which isn’t exactly aligned to the pressures on household budgets in the UK."
Elsewhere, Quilter fell after a downgrade to ‘underweight’ at JPMorgan.
On the upside, recruiter Hays rallied after it posted an 8% increase in second-quarter fees.
Market Movers
FTSE 100 (UKX) 7,841.50 -0.24%
FTSE 250 (MCX) 20,051.93 -0.15%
techMARK (TASX) 4,554.89 -0.11%
FTSE 100 - Risers
SSE (SSE) 1,703.50p 1.25%
Weir Group (WEIR) 1,830.50p 1.13%
Smiths Group (SMIN) 1,687.00p 1.08%
Diageo (DGE) 3,741.00p 1.07%
Imperial Brands (IMB) 2,069.00p 0.93%
Haleon (HLN) 327.00p 0.93%
Centrica (CNA) 97.36p 0.91%
Phoenix Group Holdings (PHNX) 633.60p 0.83%
BAE Systems (BA.) 838.20p 0.79%
3i Group (III) 1,451.50p 0.76%
FTSE 100 - Fallers
Ocado Group (OCDO) 757.80p -6.21%
Berkeley Group Holdings (The) (BKG) 4,359.00p -2.20%
JD Sports Fashion (JD.) 158.90p -1.76%
Sage Group (SGE) 759.60p -1.58%
Airtel Africa (AAF) 117.60p -1.51%
Glencore (GLEN) 545.30p -1.30%
CRH (CDI) (CRH) 3,681.00p -1.25%
WPP (WPP) 929.20p -1.23%
Unilever (ULVR) 4,182.50p -1.12%
International Consolidated Airlines Group SA (CDI) (IAG) 157.32p -1.12%
FTSE 250 - Risers
Hays (HAS) 122.30p 2.77%
Clarkson (CKN) 3,075.00p 2.50%
Synthomer (SYNT) 154.00p 2.33%
Syncona Limited NPV (SYNC) 179.00p 2.29%
TUI AG Reg Shs (DI) (TUI) 179.75p 2.16%
Softcat (SCT) 1,243.00p 2.14%
Network International Holdings (NETW) 321.80p 2.09%
Babcock International Group (BAB) 307.20p 2.06%
VinaCapital Vietnam Opportunity Fund Ltd. (VOF) 473.50p 1.83%
Indivior (INDV) 1,974.00p 1.65%
FTSE 250 - Fallers
NCC Group (NCC) 195.00p -5.80%
Quilter (QLT) 97.26p -4.46%
BH Macro Ltd. GBP Shares (BHMG) 4,465.00p -3.98%
Volution Group (FAN) 387.00p -3.85%
ASOS (ASC) 758.00p -3.25%
Ascential (ASCL) 217.20p -3.04%
International Distributions Services (IDS) 223.40p -2.95%
Investec (INVP) 521.20p -2.83%
4Imprint Group (FOUR) 4,510.00p -2.49%
Currys (CURY) 63.75p -2.30%