London open: Stocks gain as investors mull jobs data

London stocks rose in early trade on Tuesday, having slumped in the previous session amid worries about tensions between Russia and Ukraine, as investors mulled the latest UK jobs data.

At 0850 GMT, the FTSE 100 was up 0.8% at 7,591.00.

Richard Hunter, head of markets at Interactive Investor, said: "Mixed reports on the escalating tensions between Russia and concerned nations have suggested that on the one hand, the threat of an invasion is nearing, yet hopes for a diplomatic solution are not yet exhausted. Amid such uncertainty, there has been something of a flight to haven investments such as gold and the US dollar, while the possibility of a further supply shock leaves the oil price currently ahead by 23% in the year to date.

"The general level of risk aversion is continuing to be somewhat circular, passing in turn between the US, Asia and Europe. The brisk progress which had been made by the FTSE 100 this year has been shaken by wider political and economic events, although the premier index is still clinging on to a gain of 2% in the year to date."

On the macro front, figures released earlier by the Office for National Statistics showed that wages rose in the final quarter of 2021 as the Labour market withstood the end of furlough and the start of the Omicron wave.

Average weekly earnings including bonuses increased 4.3% in the three months to the end of December, the ONS said. Excluding bonuses, earnings rose 3.7%.

Nominal incomes rose in a tight labour market as employment rose 0.1 percentage point to 75.5% and unemployment fell 0.2 point to 4.1% - in line with expectations. The number or payroll employees rose 108,000 in January to a record 29.5m.

With consumer prices rising at 5.4%, real earnings dipped 0.1%. The Bank of England expects inflation to peak at more than 7%, resulting in the central bank's monetary policy committee (MPC) raising interest rates at its February meeting for the second time in three months.

The BoE is concerned about rising wages causing further increases in inflation. Governor Andrew Bailey has urged workers to moderate wage demands though some economists have argued there is little prospect of a 1970s-style inflationary spiral.

Paul Dales, chief UK economist at Capital Economics, said: "The labour market appears to have shrugged off the end of the furlough scheme and the start of the Omicron wave, which will only encourage the MPC to continue raising interest rates. Dale said falling real earnings were "something we're going to have to get used to. But the MPC will be more worried about how the tight labour market may add to inflationary pressures further ahead."

In equity markets, Glencore rallied after saying it would pay $4bn (£3bn) to shareholders as the company reported an 84% increase in underlying earnings, boosted by soaring commodity prices.

AstraZeneca gained after it said cancer drug Lynparza used with a common hormone therapy prolonged the life of end-stage prostate cancer treatments compared with the current treatment.

BHP edged lower even as it said it was handing back more than $7bn to shareholders in a record half-year dividend as soaring commodities helped the world’s biggest mining company post a jump in profits.

Market Movers

FTSE 100 (UKX) 7,591.00 0.79%
FTSE 250 (MCX) 21,683.30 0.30%
techMARK (TASX) 4,362.62 0.46%

FTSE 100 - Risers

Glencore (GLEN) 437.05p 3.40%
AstraZeneca (AZN) 8,648.00p 3.19%
Coca-Cola HBC AG (CDI) (CCH) 2,477.00p 2.99%
Ocado Group (OCDO) 1,331.00p 2.35%
Evraz (EVR) 321.70p 2.25%
Melrose Industries (MRO) 154.90p 1.91%
Informa (INF) 619.80p 1.87%
Airtel Africa (AAF) 146.80p 1.73%
Lloyds Banking Group (LLOY) 52.53p 1.57%
Diageo (DGE) 3,685.50p 1.56%

FTSE 100 - Fallers

Rio Tinto (RIO) 5,689.00p -1.07%
HSBC Holdings (HSBA) 552.40p -1.04%
Flutter Entertainment (CDI) (FLTR) 11,005.00p -0.99%
Fresnillo (FRES) 661.60p -0.63%
Standard Chartered (STAN) 549.20p -0.47%
Land Securities Group (LAND) 785.20p -0.46%
Next (NXT) 7,148.00p -0.25%
Anglo American (AAL) 3,616.50p -0.25%
Smiths Group (SMIN) 1,538.00p -0.16%
London Stock Exchange Group (LSEG) 6,870.00p -0.09%

FTSE 250 - Risers

Aston Martin Lagonda Global Holdings (AML) 1,155.00p 2.58%
Apax Global Alpha Limited (APAX) 210.00p 2.44%
Hays (HAS) 146.50p 2.30%
Cineworld Group (CINE) 40.97p 2.17%
Wizz Air Holdings (WIZZ) 4,446.00p 2.03%
Contour Global (GLO) 184.20p 1.99%
Investec (INVP) 448.30p 1.98%
Pagegroup (PAGE) 599.00p 1.96%
Reach (RCH) 244.50p 1.87%
Tyman (TYMN) 358.00p 1.70%

FTSE 250 - Fallers

Darktrace (DARK) 345.60p -5.24%
Syncona Limited NPV (SYNC) 193.80p -2.91%
Network International Holdings (NETW) 227.70p -2.53%
Ferrexpo (FXPO) 270.20p -2.24%
Drax Group (DRX) 617.50p -2.14%
888 Holdings (888) 266.40p -1.91%
Micro Focus International (MCRO) 428.20p -1.52%
Carnival (CCL) 1,488.00p -1.23%
Rank Group (RNK) 162.00p -1.22%
JPMorgan Japanese Inv Trust (JFJ) 532.00p -1.12%