London open: Stocks rise as investors mull jobs data

London stocks rose in early trade on Tuesday, taking their cue from a late-stage rally on Wall Street, as investors digested the latest UK jobs data.

At 0900 BST, the FTSE 100 was up 0.5% at 7,178.93.

Neil Wilson, head of markets at Markets.com, said: "Cooler rates and broadly positive risk sentiment helped send the Nasdaq composite to a record high on Monday, whilst the tech sector lifted the broader market as the S&P 500 also notched a fresh all-time closing high.

"Mega tech names led the gains for the index, whilst financials were the biggest drag. European stock markets are broadly higher in early trade. Growth/tech have come back, whilst the reopening/reflation trade has cooled somewhat.

"Ahead of the Federal Reserve meeting this week there is no sign of a tantrum. Stocks are happy to catch the tailwinds higher despite being caught between a super-hot inflation reading last week and the Fed’s policy meeting."

The Fed’s two-day meeting begins later on Tuesday and investors will be paying close attention to the language from the FOMC’s statement and what the latest economic projections will tell us, Wilson said.

On home shores, figures released earlier by the Office for National Statistics showed the UK unemployment rate fell in April as the economy began to reopen. The unemployment rate declined to 4.7% in the three months to April from 4.8% in March and in line with consensus expectations.

Non-essential shops and outdoor hospitality reopened in April, while indoor hospitality resumed in May.

The data showed the number of payrolled employees rose for the sixth consecutive month, up by 197,000 in May to 28.5m. However, it was still 553,000 below pre-pandemic levels. Since February 2020, the largest declines in payrolled employment have been in the accommodation and food services sector, people aged under 25 years, and those living in London.

ONS head of economic statistics Sam Beckett said: "The number of employees on payroll grew strongly in May, up by almost 200,000, although it is still over half a million down since the pandemic struck.

"Job vacancies continued to recover in the spring, and our early estimates suggest that by May the total had surpassed its pre-pandemic level, with strong growth in sectors such as hospitality. Meanwhile the redundancy rate remains subdued, while the number of employees on furlough has continued to decline."

On Monday, Prime Minister Boris Johnson announced a four-week delay to the lifting of lockdown in England, which had been due to take place on 21 June. According to reports, Chancellor Rishi Sunak will not be extending furlough support despite the reopening delay.

In equity markets, Primark owner Associated British Foods was the biggest gainer on the FTSE 100, with traders pointing to readacross from a positive first-quarter update from fast fashion retailer Boohoo.

British Airways and Iberia parent IAG was also a high riser, having fallen sharply on Monday, while Just Eat rallied after completing the acquisition of Grubhub.

Bellway edged lower even as it reported strong demand for new homes in the second half of its financial year as buyers looked for larger properties with home-working space. The company lifted its forecasts for the average selling price to £300,000 from £293,000. The order book rose 20.5% to £1.89bn in the four months to June 6.

Anglo American was hit by a downgrade to ‘sector perform’ from ‘outperform’ at RBC Capital Markets, while recruiter PageGroup was knocked lower by a downgrade to ‘underweight’ from ‘equalweight’ at Morgan Stanley.

Market Movers

FTSE 100 (UKX) 7,178.93 0.45%
FTSE 250 (MCX) 22,811.27 0.29%
techMARK (TASX) 4,479.76 0.61%

FTSE 100 - Risers

Associated British Foods (ABF) 2,381.00p 3.88%
International Consolidated Airlines Group SA (CDI) (IAG) 198.44p 1.91%
British American Tobacco (BATS) 2,846.00p 1.81%
London Stock Exchange Group (LSEG) 7,904.00p 1.72%
Kingfisher (KGF) 350.20p 1.71%
Just Eat Takeaway.Com N.V. (CDI) (JET) 6,469.00p 1.70%
Ferguson (FERG) 9,784.00p 1.68%
Rolls-Royce Holdings (RR.) 109.10p 1.62%
Prudential (PRU) 1,508.00p 1.55%
Legal & General Group (LGEN) 280.90p 1.44%

FTSE 100 - Fallers

Anglo American (AAL) 3,074.00p -1.24%
Flutter Entertainment (CDI) (FLTR) 13,520.00p -1.17%
HSBC Holdings (HSBA) 434.45p -1.14%
Antofagasta (ANTO) 1,517.50p -0.95%
Mondi (MNDI) 1,937.50p -0.90%
Smith (DS) (SMDS) 441.90p -0.83%
Intermediate Capital Group (ICP) 2,322.00p -0.77%
Glencore (GLEN) 325.15p -0.76%
BP (BP.) 328.00p -0.73%
Fresnillo (FRES) 855.80p -0.70%

FTSE 250 - Risers

SSP Group (SSPG) 326.50p 3.29%
Allianz Technology Trust (ATT) 278.00p 2.96%
Fidelity China Special Situations (FCSS) 424.50p 2.29%
Paragon Banking Group (PAG) 557.00p 2.20%
Capita (CPI) 40.50p 2.14%
Volution Group (FAN) 418.50p 2.07%
Just Eat Takeaway.Com N.V. (CDI) (JET) 6,469.00p 1.70%
easyJet (EZJ) 947.60p 1.61%
Ascential (ASCL) 395.80p 1.49%
Aston Martin Lagonda Global Holdings (AML) 2,025.00p 1.43%

FTSE 250 - Fallers

Pagegroup (PAGE) 587.00p -2.98%
Elementis (ELM) 148.80p -2.30%
Virgin Money UK (VMUK) 205.10p -2.01%
CMC Markets (CMCX) 462.50p -1.28%
888 Holdings (888) 379.00p -1.10%
Marks & Spencer Group (MKS) 155.50p -0.96%
Hochschild Mining (HOC) 174.60p -0.91%
Ibstock (IBST) 232.00p -0.85%
Hiscox Limited (DI) (HSX) 787.80p -0.71%
Grafton Group Ut (CDI) (GFTU) 1,127.00p -0.70%