London midday: Stocks rally after mixed UK jobs report

UK stocks rallied on Wednesday as oil prices recovered and as investors weighed mixed jobs data.

Oil prices were on the rise after global oil producers agreed to freeze oil production at January levels. The agreement came after a meeting in Doha on Tuesday between Saudi Arabian oil minister Ali al-Naimi, his Russian counterpart Alexander Novak and representatives from Venezuela and Qatar.

Brent crude increased 2.1% to $32.89 per barrel and West Texas Intermediate climbed 2.02% to $29.64 per barrel at 1138 GMT.

Meanwhile, the Office for National Statistics revealed the UK unemployment rate remained unchanged at 5.1% in the three months to December, missing expectations of 5.0%.

UK employers added 205,000 jobs to the economy during the three-month period, below forecasts for 225,000 extra people in work. Average weekly earnings rose 1.9%, in line with estimates, marking a slowdown from the previous quarter’s 2% increase. Jobless claims in January fell 14,800, ahead of expectations for a 3,000 drop.

“Today’s UK jobs market data looks fairly bullish. The unemployment rate remains at its lowest level in almost a decade and wage growth has ticked up," said Dennis de Jong, managing director at UFX.com.

Capital Economics said the easing in wages adds to the Bank of England’s case to keep interest rates unchanged for the time being. The BoE noted in its Inflation Report earlier in February that wage growth had “eased significantly” more than anticipated.

“The soft UK pay growth shown in today’s labour market figures – which is still at odds with the tightening labour market – highlights why the MPC won’t be raising rates anytime soon,” said Ruth Miller, UK economist at Capital Economics.

Still to come, US housing starts are due at 1330 GMT and US manufacturing and industrial output figures will be released at 1415 GMT.

The Federal Reserve also releases the minutes of its 26-27 January policy meeting at 1900 GMT, providing more details on its decision to hold interest rates steady. The minutes may offer clues on the next policy change after it raised the benchmark interest rate in December for the first time in nearly a decade.

In company news, Glencore shares gained as it announced it had signed a new revolving credit facility to replace its existing one.

Astrazeneca edged higher after winning fast-track US regulatory approval for a particular application of its most promising cancer drugs.

Utilitywise advanced as the utility cost management consultancy said its performance in the six months to the end January was in line with management expectations and the full year should also be in line.

Other utility stocks were in the red, including National Grid, Severn Trent and United Utilities Group.

Reckitt Benckiser jumped after Investec upgraded the stock to ‘hold’ from ‘sell’ and lifted the target price to 6,600p from 5,210p following the company’s full year results.

Market Movers

FTSE 100 (UKX) 5,950.46 1.51%
FTSE 250 (MCX) 15,960.69 1.65%
techMARK (TASX) 3,065.25 1.74%

FTSE 100 - Risers

Glencore (GLEN) 112.95p 9.71%
Anglo American (AAL) 428.00p 7.55%
Burberry Group (BRBY) 1,268.00p 4.62%
Rolls-Royce Holdings (RR.) 658.50p 4.28%
Sainsbury (J) (SBRY) 259.30p 3.89%
Legal & General Group (LGEN) 219.20p 3.54%
InterContinental Hotels Group (IHG) 2,387.00p 3.51%
BHP Billiton (BLT) 717.10p 3.48%
Hargreaves Lansdown (HL.) 1,223.00p 3.47%
Antofagasta (ANTO) 455.70p 3.43%

FTSE 100 - Fallers

Randgold Resources Ltd. (RRS) 5,975.00p -0.50%
National Grid (NG.) 951.00p -0.47%
Severn Trent (SVT) 2,119.00p -0.24%
easyJet (EZJ) 1,535.00p -0.20%
United Utilities Group (UU.) 917.00p -0.11%
GlaxoSmithKline (GSK) 1,416.50p -0.07%
HSBC Holdings (HSBA) 448.10p -0.02%
Rexam (REX) 597.50p 0.00%
SABMiller (SAB) 4,178.50p 0.08%
Standard Life (SL.) 342.00p 0.12%

FTSE 250 - Risers

Fidessa Group (FDSA) 2,231.00p 8.78%
Pendragon (PDG) 38.23p 7.69%
Electrocomponents (ECM) 225.00p 7.40%
Savills (SVS) 697.00p 6.41%
Sophos Group (SOPH) 204.30p 6.30%
Spectris (SXS) 1,740.00p 5.58%
Senior (SNR) 218.00p 5.31%
Nostrum Oil & Gas (NOG) 270.10p 5.26%
Amec Foster Wheeler (AMFW) 370.10p 5.17%
Virgin Money Holdings (UK) (VM.) 302.90p 4.81%

FTSE 250 - Fallers

Acacia Mining (ACA) 220.70p -2.39%
CLS Holdings (CLI) 1,412.61p -1.28%
Drax Group (DRX) 232.20p -1.28%
Centamin (DI) (CEY) 78.50p -1.26%
Ladbrokes (LAD) 119.80p -1.07%
NB Global Floating Rate Income Fund Ltd GBP (NBLS) 85.85p -0.52%
Weir Group (WEIR) 910.00p -0.49%
Just Retirement Group (JRG) 125.30p -0.40%
Booker Group (BOK) 160.80p -0.31%
BH Macro Ltd. GBP Shares (BHMG) 2,007.00p -0.30%