London midday: Stocks tick up, sterling gains as jobs data reinforces rate hike expectations

London stocks had ticked higher by midday on Tuesday but gains were muted as sterling rallied after the latest UK jobs data reinforced rate hike expectations.

The FTSE 100 was up 0.2% at 7,365.37, while the pound was 0.2% firmer against the dollar at 1.3448 and 0.3% higher versus the euro at 1.1830.

Data out earlier from the Office for National Statistics showed the unemployment rate fell again in September, while the number of workers on payrolls rose despite the end of the furlough scheme. The number of workers on payrolls rose 0.6%, or by 160,000 between September and October to 29.3m.

Sam Beckett, ONS head of economic statistics, said: "It might take a few months to see the full impact of furlough coming to an end, as people who lost their jobs at the end of September could still be receiving redundancy pay.

"However, October's early estimate shows the number of people on the payroll rose strongly on the month and stands well above its pre-pandemic level."

Meanwhile, the unemployment rate fell to 4.3% in the three months to September from 4.5% in August, coming in slightly below consensus expectations of 4.4%.

Russ Mould, investment director at AJ Bell, said: "The FTSE 100 continues to be stuck in a bit of a holding pattern.

"Holding the index back a bit was strength in the pound, hitting the relative value of its dominant overseas earnings, as stronger than expected unemployment figures suggested Bank of England Governor and ‘unreliable boyfriend’ Andrew Bailey might deliver the promised rate rise in December."

In equity markets, Vodafone was the standout gainer as it lifted earnings and cash-flow guidance after reporting a rise in first-half adjusted core profits.

Land Securities rallied after saying it swung back to a profit in the first half following a recovery in the Central London office market. Peer British Land was also higher.

Drinks group Diageo was on the rise after raising its medium-term sales growth guidance, driven by market share across its operating regions.

Restaurant Group surged as it upped its full-year earnings expectations following like-for-like sales outperformance versus the market across its Wagamama, pubs and leisure businesses.

Homeserve traded up as it lifted its dividend and posted a jump in interim profit and revenue thanks to a strong performance in North America and Continental Europe and from its Home Experts business.

Trainline was boosted by an initiation by Liberum at ‘buy’, as the broker said it was well positioned to benefit from the continued shift of ticket sales online, thus capturing incremental market share.

On the downside, plastic pipe maker Genuit fell after it said operating margins in the second half would be lower due to the impact of inflationary pressures, as it maintained full-year guidance.

Premier Foods slumped as the Mr Kipling and Oxo owner reported a decline in first-half profit and revenue as the benefit of lockdowns faded, with people eating out more as restrictions were lifted.

Market Movers

FTSE 100 (UKX) 7,365.37 0.18%
FTSE 250 (MCX) 23,597.65 -0.10%
techMARK (TASX) 4,610.15 0.06%

FTSE 100 - Risers

Vodafone Group (VOD) 119.04p 5.81%
Land Securities Group (LAND) 743.80p 4.73%
British Land Company (BLND) 532.60p 2.94%
Intertek Group (ITRK) 5,258.00p 2.58%
Diageo (DGE) 3,914.00p 2.54%
BP (BP.) 348.35p 1.99%
Royal Dutch Shell 'B' (RDSB) 1,704.00p 1.38%
Royal Dutch Shell 'A' (RDSA) 1,699.40p 1.37%
Aveva Group (AVV) 3,309.00p 1.35%
Fresnillo (FRES) 974.40p 1.31%

FTSE 100 - Fallers

Darktrace (DARK) 556.00p -2.20%
Ocado Group (OCDO) 1,777.00p -2.15%
Severn Trent (SVT) 2,768.00p -1.91%
AstraZeneca (AZN) 8,799.00p -1.88%
United Utilities Group (UU.) 1,057.50p -1.21%
St James's Place (STJ) 1,566.00p -1.14%
Sage Group (SGE) 740.80p -1.12%
Tesco (TSCO) 282.80p -1.08%
Associated British Foods (ABF) 2,001.00p -1.04%
Spirax-Sarco Engineering (SPX) 16,965.00p -0.99%

FTSE 250 - Risers

Restaurant Group (RTN) 93.70p 18.16%
Homeserve (HSV) 897.50p 4.79%
Network International Holdings (NETW) 341.60p 4.72%
Trainline (TRN) 310.00p 3.89%
Domino's Pizza Group (DOM) 377.40p 3.11%
Harbour Energy (HBR) 377.60p 3.11%
Cairn Energy (CNE) 190.80p 2.36%
Wood Group (John) (WG.) 204.10p 2.20%
Syncona Limited NPV (SYNC) 206.00p 1.98%
Serco Group (SRP) 135.90p 1.42%

FTSE 250 - Fallers

Genuit Group (GEN) 606.00p -4.87%
AO World (AO.) 128.00p -4.48%
Cineworld Group (CINE) 64.40p -3.88%
Premier Foods (PFD) 110.20p -3.50%
Kainos Group (KNOS) 1,798.00p -3.39%
Quilter (QLT) 150.15p -2.05%
Pets at Home Group (PETS) 459.60p -1.63%
Just Group (JUST) 88.85p -1.55%
Petropavlovsk (POG) 23.60p -1.50%
Auction Technology Group (ATG) 1,300.00p -1.37%