London midday: GVC pacing the decline as investors mull UK jobs data
London stocks were still lower by midday on Thursday, with Ladbrokes owner GVC under the cosh after a trading update, as investors mulled the latest UK jobs data and economic growth figures out of China.
The FTSE 100 was down 0.7% at 6,248.82, having rallied on Wednesday amid reports that positive results would soon be announced from the Oxford coronavirus vaccine trials.
The downbeat tone came despite encouraging news from China, after figures from the National Bureau of Statistics showed the economy bounced back in the second quarter after taking a hit from the pandemic.
Gross domestic product grew 3.2% year-on-year following a 6.8% contraction in the first quarter, beating expectations for 2.5% growth. The first quarter contraction was the worst since quarterly GDP records began.
In seasonally adjusted terms, GDP rose 11.5% quarter-on-quarter following a 10% decline the first quarter, taking GDP back above the pre-coronavirus high reached in the fourth quarter of last year.
Industrial production and fixed asset investment data also beat expectations, but retail sales were a disappointment.
On home shores, meanwhile, figures from the Office for National Statistics showed the number of people on payrolls declined by 649,000 between March and June. Compared with May, 74,000 people lost their jobs.
ONS deputy national statistician for Economic Statistics, Jonathan Athow, said: "As the pandemic took hold, the labour market weakened markedly, but that rate of decline slowed into June, though this is before recent reports of job losses. There are now almost two-thirds of a million fewer employees on the payroll than before the lockdown, according to the latest tax data."
The unemployment rate was steady at 3.9% for the three months to May, beating expectations for a rise to 4.2%.
Self-employment fell by 178,000 between March and June to 4.85 million - marking the worst quarter on record - and vacancies in April to June were at their lowest level since the vacancy survey began, at an estimated 333,000. This is 23% lower than the previous record low in April to June 2009.
The claimant count rate came in at 7.3% in June compared to 7.4% in May, which was the highest level since May 1996. The figures also showed that jobless claims fell by 28,100 in May after surging by 853,000 in April and 566,400 in March.
Between March and June, average weekly hours worked per person declined by 5.5 hours to a record low of 26.7.
Neil Wilson, chief market analyst at Markets.com, said: "Unemployment claims were better than feared but we can pin this on furlough schemes which are extending the pretence, delaying the worst and providing a soft landing; but the jobless numbers clearly do not reflect the true extent of what’s coming. Meanwhile the number of hours worked - a key metric for the nation’s productivity - has collapsed."
More broadly, souring relations between the US and China weighed on the mood following reports the White House is mulling a ban on Chinese Communist Party members travelling to the US. Should it be introduced, the ban would apply to all party members and their families, and would also authorise the US government to revoke visas for members who were already in America, The New York Times reported.
In equity markets, Coral owner GVC Holdings slid after it reported a fall in net gaming revenue as coronavirus lockdowns forced store closures. The company also announced the departure of chief executive Kenneth Alexander.
Hays was in the red as it said annual profit would almost halve after recruitment fees fell by a third in the fourth quarter, with the UK and Ireland the worst-hit. Fellow recruiter PageGroup was also on the back foot.
Energy company SSE bucked the trend after saying it still intended to declare a dividend in November as the impact of Covid-19 on the business remained in line with expectations during the first three months of the fiscal year.
FTSE 100 - Risers
Halma (HLMA) 2,304.00p 2.22%
Avast (AVST) 576.50p 1.77%
SSE (SSE) 1,385.50p 1.61%
Antofagasta (ANTO) 1,019.00p 1.24%
InterContinental Hotels Group (IHG) 4,012.00p 1.21%
Flutter Entertainment (FLTR) 11,645.00p 1.17%
Rentokil Initial (RTO) 555.40p 1.02%
WPP (WPP) 616.40p 0.98%
Informa (INF) 437.10p 0.74%
Intermediate Capital Group (ICP) 1,345.00p 0.67%
FTSE 100 - Fallers
GVC Holdings (GVC) 870.00p -4.75%
Melrose Industries (MRO) 117.30p -4.24%
Burberry Group (BRBY) 1,409.50p -4.12%
Whitbread (WTB) 2,342.00p -2.90%
Coca-Cola HBC AG (CDI) (CCH) 2,060.00p -2.69%
Smith & Nephew (SN.) 1,617.50p -2.56%
British American Tobacco (BATS) 2,800.50p -2.44%
Associated British Foods (ABF) 1,941.50p -2.29%
Smiths Group (SMIN) 1,486.00p -2.14%
Imperial Brands (IMB) 1,399.00p -2.07%
FTSE 250 - Risers
Hochschild Mining (HOC) 228.20p 6.54%
Calisen (CLSN) 189.55p 5.31%
Oxford Biomedica (OXB) 815.00p 4.62%
Biffa (BIFF) 203.50p 4.47%
Hammerson (HMSO) 78.04p 3.89%
Dunelm Group (DNLM) 1,219.00p 3.74%
888 Holdings (888) 196.60p 3.47%
Apax Global Alpha Limited (APAX) 145.00p 2.69%
Gamesys Group (GYS) 895.00p 2.29%
Ultra Electronics Holdings (ULE) 2,110.00p 2.23%
FTSE 250 - Fallers
Fidelity China Special Situations (FCSS) 295.00p -4.07%
Pagegroup (PAGE) 373.20p -4.01%
TUI AG Reg Shs (DI) (TUI) 365.30p -3.99%
Micro Focus International (MCRO) 311.00p -3.83%
TBC Bank Group (TBCG) 819.00p -3.65%
HICL Infrastructure (HICL) 168.20p -3.33%
Hays (HAS) 122.50p -3.24%
Barr (A.G.) (BAG) 446.50p -3.04%
Vivo Energy (VVO) 75.90p -2.94%
Rotork (ROR) 274.40p -2.90%