London pre-open: Stocks seen up as investors mull jobs data

London stocks were set to rise at the open on Tuesday as investors mulled the latest UK jobs data.

The FTSE 100 was called to open 24 points higher at 7,255.

Figures out earlier from the Office for National Statistics showed that unemployment fell in the three months to October, by 127,000 compared to the previous quarter, to 1.423m. This took the unemployment rate to 4.2% from 4.3%.

Meanwhile, vacancies hit another record high in November of 1.219m, up 434,500 from before the pandemic.

Paul Dales, chief UK economist at Capital Economics, said: "Of course, the surge in Covid-19 cases and any further tightening in restrictions may reduce the demand for labour in December and January. But they may also reduce the supply of labour. In November the Bank of England wanted to wait for more news on the labour market before raising interest rates. It’s got it.

"But now we think it will want to wait for more news on Omicron before raising rates. The strength of the labour market, however, probably means that it’s a case of rate hikes being delayed beyond December rather than being Covid-cancelled."

In corporate news, Chemring increased its final dividend as the company reported an 8% increase in annual underlying profit despite a weakening of the US dollar. Underlying pre-tax profit for the year to the end of October rose to £55.9m from £51.7m a year earlier as revenue dropped 2% to £393.3m.

Excluding currency movements, profit rose 13% and revenue increased 1%. Chemring proposed a final dividend of 3.2p a share, up 23% from a year earlier, as it adopted a target of dividends covered 2.5 times by earnings. The announcement takes the annual payout to 4.8p a share.

British online supermarket group Ocado said it had won a patent infringement lawsuit filed by Norwegian robotics company AutoStore Holdings in the International Trade Commission (ITC). The ITC's Chief Administrative Law Judge held three of the four AutoStore patents were invalid while the fourth one was not infringed by Ocado, the British company said in a statement.

AutoStore abandoned its claim over a fifth patent the night before the trial. AutoStore said it plans to challenge the decision before the full commission, which will review the findings and issue a final verdict in April 2022.

Pest control services provider Rentokil Initial has agreed to acquire Terminex in a stock and cash deal that values the business at roughly $7.6bn.

Rentokil said that it will issue to Terminix shareholders approximately 643.29m new Rentokil Initial shares and around US$1.3bn in cash in order to satisfy the transaction, implying a value of $55.0 per share of Terminix common stock - a premium of 47.0% over the shares' closing price on 13 December.