London open: Stocks edge lower as investors mull Chinese, UK data
London stocks edged lower in early trade on Thursday following strong gains in the previous session, as investors digested the latest UK jobs data and economic growth figures out of China.
At 0840 BST, the FTSE 100 was down 0.4% at 6,265.92, having rallied on Wednesday amid reports that positive results would soon be announced from the Oxford coronavirus vaccine trials.
Data from the National Bureau of Statistics showed that China’s 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 UK 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%.
In addition, 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.
Spreadex analyst Connor Campbell said: "An overall positive morning for data - including a return to growth for China - didn’t mean as much to the markets as yesterday’s vaccine updates, meaning European started the session in the red on Thursday."
He said the UK jobs data painted a mixed picture. "The self-employed suffered their worst quarter on record. Job vacancies are non-existent. Weekly hours worked from March to May dropped by 5.5 hours. And, reportedly, 29% of UK businesses are preparing to cut jobs across the next three months.
"Confused by the jobs data, unbothered by China’s upswing - perhaps because the lockdown situation there was so different to what has been seen in, say, the UK and US that a comparison isn’t possible - and fatigued from yesterday’s gains, Europe opened at a loss."
In equity markets, Coral and Ladbrokes 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 the recruiter 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.
Energy company SSE gained 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.
Market Movers
FTSE 100 (UKX) 6,265.92 -0.42%
FTSE 250 (MCX) 17,346.70 -0.42%
techMARK (TASX) 3,784.08 -0.51%
FTSE 100 - Risers
WPP (WPP) 619.40p 1.47%
British Land Company (BLND) 378.60p 1.31%
BP (BP.) 313.85p 1.16%
SSE (SSE) 1,378.50p 1.10%
Informa (INF) 437.70p 0.88%
Royal Dutch Shell 'B' (RDSB) 1,270.40p 0.87%
Sainsbury (J) (SBRY) 196.70p 0.77%
Royal Dutch Shell 'A' (RDSA) 1,331.80p 0.56%
Morrison (Wm) Supermarkets (MRW) 184.50p 0.54%
Rolls-Royce Holdings (RR.) 273.40p 0.44%
FTSE 100 - Fallers
GVC Holdings (GVC) 858.20p -6.04%
Burberry Group (BRBY) 1,420.00p -3.40%
Smith & Nephew (SN.) 1,617.00p -2.59%
Ocado Group (OCDO) 2,068.00p -2.45%
Hargreaves Lansdown (HL.) 1,574.00p -2.18%
Coca-Cola HBC AG (CDI) (CCH) 2,072.00p -2.13%
Homeserve (HSV) 1,289.00p -2.05%
Anglo American (AAL) 1,913.40p -2.05%
Aveva Group (AVV) 4,049.00p -1.96%
JD Sports Fashion (JD.) 639.80p -1.84%
FTSE 250 - Risers
Watches of Switzerland Group (WOSG) 298.50p 6.80%
Cineworld Group (CINE) 59.18p 3.24%
Petrofac Ltd. (PFC) 173.30p 2.85%
Frasers Group (FRAS) 300.00p 2.39%
Carnival (CCL) 1,078.00p 2.13%
Hammerson (HMSO) 76.64p 2.02%
Airtel Africa (AAF) 62.70p 1.95%
Scottish Inv Trust (SCIN) 765.00p 1.86%
Avon Rubber (AVON) 3,555.00p 1.43%
Marks & Spencer Group (MKS) 100.35p 1.32%
FTSE 250 - Fallers
Hays (HAS) 121.30p -4.19%
HICL Infrastructure (HICL) 167.00p -4.02%
Fidelity China Special Situations (FCSS) 295.50p -3.90%
Liontrust Asset Management (LIO) 1,260.00p -2.70%
Vivo Energy (VVO) 76.20p -2.56%
Micro Focus International (MCRO) 315.50p -2.44%
International Public Partnerships Ltd. (INPP) 164.00p -2.38%
Meggitt (MGGT) 312.60p -2.13%
Future (FUTR) 1,208.00p -1.95%
IG Group Holdings (IGG) 813.50p -1.75%