London midday: Stocks maintain losses after UK jobs data, J&J trial pause
London stocks were still a little weaker by midday on Tuesday as investors mulled disappointing UK jobs data and the pausing of a Johnson & Johnson Covid-19 vaccine trial.
The FTSE 100 was down 0.4% at 5,978.40.
J&J has temporarily paused further dosing in all of its Covid-19 vaccine candidate clinical trials due to an "unexplained illness" in a study participant. The pause includes the company’s phase 3 Ensemble trial and J&J said the participant’s illness is being reviewed and evaluated by the Ensemble independent data safety monitoring board and its internal clinical and safety physicians.
IG analyst Chris Beauchamp said: "The news that Johnson & Johnson has paused its vaccine trial has not gone entirely unnoticed, but the market has learned to live with the ups and downs of product development over the past few months, with the reaction to this kind of news much more muted than during the summer."
Meanwhile, figures from the Office for National Statistics showed the unemployment rate rose more than expected August, hitting its highest level in three years as the coronavirus pandemic continues to take its toll. The unemployment rate increased to 4.5% from 4.1% in July, coming in above consensus expectations of 4.3%.
The ONS said estimates for June to August show an estimated 1.52m people were unemployed, up 209,000 on a year earlier and 138,000 higher than the previous quarter.
Redundancies increased in June to August by 113,000 on the year, and a record 114,000 on the quarter, to 227,000. The annual increase was the largest since April to June 2009, with the number of redundancies at its highest level since May to July 2009.
ONS deputy national statistician for Economic Statistics Jonathan Athow said: "Since the start of the pandemic there has been a sharp increase in those out of work and job hunting but more people telling us they are not actively looking for work. There has also been a stark rise in the number of people who have recently been made redundant."
Laith Khalaf, financial analyst at AJ Bell, said: "Looking forward things look set to get worse before they get better for the UK economy, as furlough expires and greater social restrictions are enforced, albeit not nationwide. The huge cost of the Covid crisis response also needs to be reckoned with.
"The IFS estimates borrowing will hit £350 billion this year, a level never seen in peacetime Britain. The government will probably wait until it can at least see the edge of the woods before it lays out its plans to balance the books, but tax rises looks set to be on Rishi’s menu."
Chinese trade data was more upbeat, with exports up 9.9% on the year in September and imports 13.2% higher.
Later in the day, attention will shift across the pond, with US banks JPMorgan and Citigroup due to kick off the earnings season.
In UK equity markets, stocks with exposure to the pandemic and related restrictions were under the cosh. Engine maker Rolls-Royce was the worst performer following strong gains in the previous session, while British Airways and Iberia parent IAG also lost ground.
Aerospace and defence engineer Meggitt, Upper Crust owner SSP, pub chain Mitchells & Butlers, cruise operator Carnival and travel company TUI also fell sharply.
Cineworld was under the cosh after Disney decided not to go for a full theatrical release of Pixar animation Soul, opting instead to premiere it on streaming service Disney+.
On the upside, SSE rallied after agreeing to sell its 50% share in its Multifuel energy-from-waste ventures to Australian fund manager First Sentier Investors for £995m in cash as part of its £2bn disposal programme.
Credit-checking firm Experian was also in the black after Credit Suisse upped its price target on the stock.
Market Movers
FTSE 100 (UKX) 5,978.40 -0.38%
FTSE 250 (MCX) 18,010.13 -0.87%
techMARK (TASX) 3,872.24 -0.73%
FTSE 100 - Risers
SSE (SSE) 1,364.50p 2.90%
Experian (EXPN) 3,080.00p 2.19%
Tesco (TSCO) 222.30p 1.46%
Bunzl (BNZL) 2,553.00p 1.39%
Fresnillo (FRES) 1,347.50p 1.20%
Anglo American (AAL) 1,952.00p 1.14%
Just Eat Takeaway.Com N.V. (CDI) (JET) 8,988.00p 1.10%
Morrison (Wm) Supermarkets (MRW) 174.30p 1.10%
Antofagasta (ANTO) 1,035.50p 1.02%
Vodafone Group (VOD) 112.98p 1.02%
FTSE 100 - Fallers
Rolls-Royce Holdings (RR.) 184.60p -5.26%
Hargreaves Lansdown (HL.) 1,473.50p -4.44%
Aviva (AV.) 286.90p -3.27%
Melrose Industries (MRO) 126.20p -3.26%
International Consolidated Airlines Group SA (CDI) (IAG) 98.44p -3.25%
Lloyds Banking Group (LLOY) 27.16p -3.22%
Land Securities Group (LAND) 540.50p -3.22%
Smith (DS) (SMDS) 304.00p -3.12%
British Land Company (BLND) 361.50p -3.06%
Smurfit Kappa Group (SKG) 3,126.00p -3.04%
FTSE 250 - Risers
IP Group (IPO) 82.60p 3.25%
Wood Group (John) (WG.) 219.30p 2.81%
4Imprint Group (FOUR) 2,020.00p 2.75%
Kaz Minerals (KAZ) 559.80p 1.78%
Dechra Pharmaceuticals (DPH) 3,406.00p 1.31%
Victrex plc (VCT) 2,036.00p 1.29%
BlackRock Smaller Companies Trust (BRSC) 1,378.00p 1.17%
Indivior (INDV) 112.00p 1.17%
Softcat (SCT) 1,249.00p 1.13%
Just Eat Takeaway.Com N.V. (CDI) (JET) 8,988.00p 1.10%
FTSE 250 - Fallers
Meggitt (MGGT) 288.30p -6.91%
Cineworld Group (CINE) 27.62p -6.69%
Mitchells & Butlers (MAB) 133.00p -5.54%
SSP Group (SSPG) 186.80p -5.42%
Babcock International Group (BAB) 261.70p -4.84%
Shaftesbury (SHB) 492.60p -4.53%
National Express Group (NEX) 160.00p -4.31%
Provident Financial (PFG) 209.00p -3.95%
Investec (INVP) 151.85p -3.83%
TI Fluid Systems (TIFS) 173.52p -3.69%