London open: Stocks rally as investors eye jobs data; Croda, Burberry gain

London stocks rose in early trade on Monday as investors eyed the release of key jobs data later in the week.

At 0830 GMT, the FTSE 100 was up 0.7% at 8,129.91.

Kathleen Brooks, research director at XTB, said: "In the UK, labor market data will be scrutinised to see whether wage prices have moderated. Monthly payrolls are expected to have declined by 13k in October, the 3-month-on-month unemployment rate is expected to rise a notch to 4.1% from 4% in August. Average weekly earnings are expected to rise a touch to a 3.9% quarterly rate, while excluding bonus, weekly earnings are expected to moderate to 4.7% from 4.9%.

"This data is expected to show that wage pressures remain stubborn in the UK. The unemployment rate may be rising, but at a slow pace that is not enough to weaken wages.

"The interest rate futures market has mostly priced out the chance of a December rate cut from the BOE, instead there is a 74% probability of a cut in February. We doubt that an upward surprise to labour market data or wage growth will move the dial on a February rate cut, however, it could help boost the pound. GBP/USD fell last week along with other G7 currencies, however, it had lower volatility than its peers, and is currently hovering around $1.2920.

"The election of Trump makes it hard for the pound to stage a sustained rally in the medium term, in our view, although it may be more protected from a sharp selloff compared to other G7 currencies."

In equity markets, Croda shot higher as the specialty chemicals group left full-year constant-currency profit guidance unchanged after a solid third quarter, but said a stronger pound will hit the bottom-line results more than previously expected.

Kainos was also a high riser as the software group unveiled a £30m share buyback and reported a rise in interim profit, although it remained cautious on full-year prospects.

Burberry rallied following a report the luxury brand is on the brink of being taken over by Italy’s Moncler.

According to correspondence seen by The Mail on Sunday, staff at one of Burberry's flagship London stores have already been told about the takeover.

Speculation about a potential takeover first emerged early this month when industry website Miss Tweed said Moncler was considering a buyout.

A source told The Mail that Burberry has paused discussions with business affiliates who sell its merchandise until more details of the Moncler bid have been confirmed.

They added that staff had been told not to discuss the offer with outsiders "until an official statement has come out".

Trustpilot was also in the black after an initiation at ‘buy’ at Deutsche Bank.

Direct Line was in the red after saying it plans to axe 550 jobs as part of a turnaround plan as its motor insurance arm continues to struggle amid tough trading conditions. The insurer reported a fall in third-quarter gross written premiums and associated fees to £836m compared with £1.28bn a year ago.

Direct Line said it was targeting £50m gross costs savings in 2025.

Matt Britzman, senior equity analyst at Hargreaves Lansdown, said Direct Line continues to battle "with internal demons and a tough trading environment".

"Cutting costs is one angle of attack to try and bring performance back on track, the other angle must come from stabilising the customer base, especially in the all-important motor division," he said.

"Another 71,000 own-brand motor customers were lost over the third quarter as premiums were 3% higher than last year on average. The good news is that the rate of decline in customer numbers is slowing, as insurance prices are now starting to come down after some mammoth hikes were put through earlier in the year.

"It’s no secret that Direct Line has struggled over the past few years to deal with a challenging motor insurance market, and operational missteps have weighed on performance. But armed with a new leadership team, a more refined strategy, and new growth angles like the relaunch on price comparison sites, this looks like the best version of Direct Line for some time. Whether it’s able to deliver all that’s promised remains to be seen."

Elsewhere, NatWest was in focus as it repurchased £1bn of shares from the HM Treasury, taking the government’s stake in the banking group to 11.4%.

DS Smith was lower after a downgrade to ‘equalweight’ at Barclays.

Outside the FTSE 350, Aquis Exchange flew higher after agreeing to be taken over by Swiss stock exchange operator Six Exchange Group in a £225m deal.

Market Movers

FTSE 100 (UKX) 8,129.91 0.71%
FTSE 250 (MCX) 20,697.11 0.87%
techMARK (TASX) 4,641.45 0.82%

FTSE 100 - Risers

Croda International (CRDA) 3,768.00p 4.55%
Vistry Group (VTY) 762.00p 3.25%
Fresnillo (FRES) 714.50p 2.07%
Rolls-Royce Holdings (RR.) 564.00p 1.95%
Ashtead Group (AHT) 6,402.00p 1.85%
Melrose Industries (MRO) 515.20p 1.78%
BAE Systems (BA.) 1,401.50p 1.74%
Smith & Nephew (SN.) 932.80p 1.66%
Hiscox Limited (DI) (HSX) 1,055.00p 1.64%
HSBC Holdings (HSBA) 700.90p 1.58%

FTSE 100 - Fallers

Smith (DS) (SMDS) 561.00p -0.80%
Rio Tinto (RIO) 4,914.00p -0.65%
Sainsbury (J) (SBRY) 247.80p -0.56%
Anglo American (AAL) 2,362.50p -0.40%
International Consolidated Airlines Group SA (CDI) (IAG) 233.60p -0.38%
Imperial Brands (IMB) 2,358.00p -0.38%
Glencore (GLEN) 393.70p -0.28%
Flutter Entertainment (DI) (FLTR) 19,075.00p -0.26%
Tesco (TSCO) 344.50p -0.20%
easyJet (EZJ) 540.60p -0.15%

FTSE 250 - Risers

Kainos Group (KNOS) 848.00p 6.67%
Trustpilot Group (TRST) 270.50p 5.25%
Dr. Martens (DOCS) 58.75p 4.72%
Energean (ENOG) 991.50p 4.15%
North Atlantic Smaller Companies Inv Trust (NAS) 3,910.00p 3.17%
ITV (ITV) 64.80p 2.86%
Serco Group (SRP) 164.10p 2.56%
PPHE Hotel Group Ltd (PPH) 1,240.00p 2.48%
Babcock International Group (BAB) 499.60p 2.42%
Domino's Pizza Group (DOM) 338.60p 2.36%

FTSE 250 - Fallers

Wood Group (John) (WG.) 55.95p -3.28%
RHI Magnesita N.V. (DI) (RHIM) 3,115.00p -0.95%
Investec (INVP) 618.50p -0.72%
Asia Dragon Trust (DGN) 435.00p -0.68%
Bellevue Healthcare Trust (Red) (BBH) 140.00p -0.57%
Pacific Horizon Inv Trust (PHI) 573.00p -0.52%
JPMorgan Indian Investment Trust (JII) 986.00p -0.40%
Pantheon International (PIN) 321.50p -0.31%
The Global Smaller Companies Trust (GSCT) 165.00p -0.24%
Finsbury Growth & Income Trust (FGT) 850.00p -0.23%