London close: Better-than-expected jobs data keep stocks in the green

The FTSE 100 ended the session up 0.02%, or just 1.39 points, at 7,034.24, while the FTSE 250 added 0.53% to 22,332.56.

Sterling was in a mixed state, last trading 0.38% stronger on the dollar at $1.4187, while it was 0.09% weaker against the euro to change hands at €1.1624.

“The pound is closing in on a three-year high, with improved jobs data lifting sentiment despite recent fears over delays to the 21 June lockdown easing,” said IG senior market analyst Joshua Mahony.

“The continued decline in UK claimants came as a surprise this morning, with the unemployment rate also falling in response.

“The easing of Covid restrictions has helped lift the number of people on company payrolls last month, with roughly 97,000 more people back in payrolled employment compared with March.”

From a UK perspective, Mahony said the recent fears that the 21 June end to lockdown restrictions could be pushed back had been allayed to a certain degree, with prime minister Boris Johnson more likely to favour local restrictions over nationwide policy.

“The growth in the Indian strain certainly does raise questions given the apparent higher rate of transmission.

“However, markets have been appeased somewhat by claims that the vaccines appear to be effective against this latest form of the virus.”

Figures from the Office for National Statistics earlier showed the unemployment rate unexpectedly ticked lower in the first quarter, despite the national lockdown.

The unemployment rate nudged down to 4.8% in the three months to March, from 4.9% in February and versus expectations for it to be unchanged.

Those figures suggested the jobs market had been broadly stable in recent months, the ONS said, "with some early signs of recovery".

The number of payrolled workers rose by 97,000 in April, marking the fifth monthly increase in a row, although it remained 772,000 below pre-pandemic levels.

Since February 2020, the largest falls in payrolled employment had been in the hospitality sector, among those aged under 25, and those living in London.

Capital Economics said the slight fall in the unemployment rate suggested that the government’s job furlough scheme was still insulating the labour market from the worst effects of the pandemic.

"And the improving outlook for activity suggests that our forecast that the unemployment rate will rise to a peak of 6.0% by early 2022 may be too pessimistic," said UK economist Thomas Pugh.

In equity markets, Imperial Brands gained 1.51% after the tobacco behemoth said it was on track to deliver full-year results in line with guidance, as it reported a jump in first-half profit and revenue.

Micro Focus jumped 6.83% as the software group said its first-half performance was set to be ahead of market expectations.

Oxford Biomedica leapt 10.38% as the gene and cell therapy company doubled annual earnings guidance after pharmaceutical giant AstraZeneca ordered more Covid-19 vaccines.

Doorstep lender Provident Financial was on the front foot by 3.97%, after an upgrade to ‘outperform’ at KBW.

Food producer and supplier Cranswick was 7.7% higher after lifting its dividend and reporting a 10.4% rise in annual profits.

Promotional products peddler 4Imprint traded up 10.65% after it said the first four months of 2021 had shown "very encouraging" progress in the recovery from the effects of the pandemic.

Britvic effervesced 3.54% higher after the soft drinks maker reinstated its dividend despite posting a decline in first-half profit and revenue, as it hailed an encouraging start to the second half.

On the downside, Vodafone Group slid 8.91% after it reported lower-than-expected adjusted core earnings as Covid travel restrictions hit roaming revenues.

Homeserve retreated 8.53% despite saying that full-year revenues had grown year-on-year, mainly due to a solid performance from its North American unit.

Market Movers

FTSE 100 (UKX) 7,034.24 0.02%
FTSE 250 (MCX) 22,332.56 0.53%
techMARK (TASX) 4,272.54 0.12%

FTSE 100 - Risers

International Consolidated Airlines Group SA (CDI) (IAG) 196.56p 3.63%
Sage Group (SGE) 663.40p 3.14%
JD Sports Fashion (JD.) 918.40p 2.75%
NATWEST GROUP PLC ORD 100P (NWG) 198.55p 2.66%
BT Group (BT.A) 170.85p 2.59%
Scottish Mortgage Inv Trust (SMT) 1,146.00p 2.50%
Pershing Square Holdings Ltd NPV (PSH) 2,590.00p 2.37%
Kingfisher (KGF) 376.40p 2.12%
Polymetal International (POLY) 1,674.50p 1.73%
Just Eat Takeaway.Com N.V. (CDI) (JET) 6,265.00p 1.72%

FTSE 100 - Fallers

Vodafone Group (VOD) 129.08p -8.91%
Antofagasta (ANTO) 1,616.00p -5.17%
Fresnillo (FRES) 894.80p -2.29%
DCC (CDI) (DCC) 5,990.00p -1.74%
Pearson (PSON) 852.00p -1.27%
Informa (INF) 545.20p -0.91%
Phoenix Group Holdings (PHNX) 723.60p -0.82%
Hargreaves Lansdown (HL.) 1,683.00p -0.77%
Unilever (ULVR) 4,279.00p -0.73%
Bunzl (BNZL) 2,307.00p -0.56%

FTSE 250 - Risers

4Imprint Group (FOUR) 2,545.00p 10.65%
Oxford Biomedica (OXB) 1,102.00p 10.38%
Cranswick (CWK) 4,000.00p 7.70%
Micro Focus International (MCRO) 503.40p 6.83%
Trainline (TRN) 436.40p 4.90%
WH Smith (SMWH) 1,723.50p 4.49%
Carnival (CCL) 1,659.40p 4.19%
Provident Financial (PFG) 251.60p 3.97%
Helios Towers (HTWS) 170.00p 3.91%
Hochschild Mining (HOC) 204.20p 3.60%

FTSE 250 - Fallers

Homeserve (HSV) 950.50p -8.53%
Lancashire Holdings Limited (LRE) 664.50p -3.01%
Ascential (ASCL) 342.00p -2.79%
Redde Northgate (REDD) 381.50p -2.44%
AJ Bell (AJB) 426.20p -2.25%
Wood Group (John) (WG.) 265.10p -2.14%
Vistry Group (VTY) 1,263.50p -1.83%
IG Group Holdings (IGG) 853.50p -1.73%
JTC (JTC) 654.00p -1.50%
Rathbone Brothers (RAT) 1,774.00p -1.44%