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London open: Stocks rise after UK jobs data
London stocks rose in early trade on Tuesday as investors cheered better-than-expected UK jobs data.
At 0900 BST, the FTSE 100 was up 0.6% at 7,075.64, while sterling was up 0.5% against the dollar at 1.4203.
Figures released earlier by the Office for National Statistics 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.
The ONS said the latest figures suggest the jobs market has been broadly stable in recent months, “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, but remains 772,000 below pre-pandemic levels. Since February 2020, the largest falls in payrolled employment have been in the hospitality sector, among those aged under 25 years, and those living in London.
Capital Economics said the slight fall in the unemployment rate suggests that the government’s job furlough scheme is 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 after the tobacco company 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 surged as the software group said its first-half performance was set to be ahead of market expectations.
Oxford Biomedica was in the black as the gene and cell therapy company doubled annual earnings guidance after pharmaceutical giant AstraZeneca ordered more Covid-19 vaccines.
London Stock Exchange shares rallied after Morgan Stanley resumed coverage of the stock at ‘overweight’.
4Imprint traded up after it said the first four months of 2021 had shown “very encouraging” progress in the recovery from the effects of the pandemic.
Britvic fizzed 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 slid after it reported lower-than-expected adjusted core earnings as Covid travel restrictions hit roaming revenues.
Land Securities fell as it said full-year losses had widened as its London-focused office portfolio suffered amid Covid-19 related work-from-home measures.
Top 10 FTSE 100 Risers
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| 76.4% of retail CFD accounts lose money. | |
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Micro Focus International Plc | +8.02% | +37.80 | 509.00 |
| 2 |  |
International Consolidated Airlines Group S.a. | +2.61% | +4.96 | 194.64 |
| 3 |  |
Fresnillo Plc | +2.60% | +23.80 | 939.60 |
| 4 |  |
Imperial Brands Plc | +2.42% | +38.50 | 1,628.50 |
| 5 |  |
Carnival Plc | +2.12% | +33.80 | 1,626.40 |
| 6 |  |
Ashtead Group Plc | +2.05% | +102.00 | 5,078.00 |
| 7 |  |
Easyjet Plc | +1.85% | +18.20 | 1,004.00 |
| 8 |  |
Burberry Group Plc | +1.77% | +37.00 | 2,125.00 |
| 9 |  |
Standard Chartered Plc | +1.77% | +8.80 | 507.00 |
| 10 |  |
Flutter Entertainment Plc | +1.65% | +205.00 | 12,665.00 |
Top 10 FTSE 100 Fallers
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| 76.4% of retail CFD accounts lose money. | |
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Vodafone Group Plc | -6.65% | -9.42 | 132.28 |
| 2 |  |
Hargreaves Lansdown Plc | -0.71% | -12.00 | 1,684.00 |
| 3 |  |
Glaxosmithkline Plc | -0.49% | -6.80 | 1,372.80 |
| 4 |  |
Land Securities Group Plc | -0.48% | -3.40 | 711.60 |
| 5 |  |
Antofagasta Plc | -0.47% | -8.00 | 1,694.00 |
| 6 |  |
Experian Plc | -0.34% | -9.00 | 2,627.00 |
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Intertek Group Plc | -0.24% | -14.00 | 5,824.00 |
| 8 |  |
Segro Plc | -0.16% | -1.60 | 997.40 |
| 9 |  |
Unilever Plc | -0.14% | -6.00 | 4,304.50 |
| 10 |  |
Compass Group Plc | -0.13% | -2.00 | 1,513.50 |
Europe open: Shares up on easing optimism, UK employment data
European stocks started the session in positive mood on Tuesday as investors were cheered by the relaxation of Covid-19 restrictions and a falling UK unemployment rate.
The pan-European STOXX 600 index rose 0.75% by 0743 GMT, just below record levels. The UK’s FTSE 100 was up 0.81%, while Germany’s DAX rose 0.8% to hit a record high, while Italy’s FTSE MIB added 0.8%.
Britain’s unemployment rate unexpectedly ticked lower in the first quarter despite the national lockdown, according to figures released by the Office for National Statistics on Tuesday.
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. Data suggested the jobs market has been broadly stable in recent months, “with some early signs of recovery”.
Shares in embattled German leasing business Grenke soared 15% to top the Stoxx index after the company late on Monday announced auditing firm KPMG has issued an unqualified audit opinion for its annual and consolidated financial statements as of December 31, 2020.
The company was in February told to correct its 2019 results after a special audit ordered by regulators uncovered a string of failings.
Micro Focus shares surged on Tuesday after the software company said its first-half performance was set to be ahead of market views.
Sonova Holding surged 8.5% after the world’s biggest maker of hearing aids predicted strong growth this year due to a market recovery and new products.
Soft drinks maker Britvic rose 4% as the firm reinstated its dividend, despite reporting a decline in first-half profit and revenue, as it hailed an encouraging start to the second half.
Vodafone shares fell 6.6% after the UK mobile operator reported a 1.2% drop in full-year adjusted core earnings as Covid-19 hit roaming revenue.
US close: Stocks weaker on first session of the week
Wall Street stocks closed weaker on Monday, following the worst week for major US indices since February.
At the close, the Dow Jones Industrial Average was down 0.16% at 34,327.79, as the S&P 500 lost 0.25% to 4,163.29, and the Nasdaq Composite was 0.38% weaker at 13,379.05.
The Dow closed 54.34 points lower on Friday, cutting into gains recorded in the final session of an otherwise lacklustre week for stocks.
On the macro front, manufacturing sector activity in the jurisdiction of the Federal Reserve Bank of New York slipped a bit last month, with the so-called ‘Empire State’ index dipping from a reading of 26.3 for April to 24.3 in May.
Economists had pencilled-in a reading of 23.9.
Elsewhere, the National Association of Home Builders‘ housing market index came in at a print of 83 in May, unchanged from April’s reading, supported by low inventories and strong demand despite rising prices and limited availability of certain building materials.
In equity markets, AT&T was down 2.7% and Discovery lost 5.05%, even after news of a potential merger of the former’s WarnerMedia unit – which includes HBO – with the latter emerged.
The new company was set to trade as its own public entity.
Major tech stocks, which took a beating last week, were down again on Monday, with Apple down 0.93%, Facebook off 0.15%, and Netflix losing 0.9%.
Google owner Alphabet, meanwhile, reversed earlier losses to close 0.23% firmer.
Tuesday newspaper round-up: Rolls-Royce, Amazon, Pendragon
Britain risks mirroring Italy’s economic woes unless it develops a strategy for tackling the five seismic changes that will shape a decisive decade for the country, a report has warned. A joint project by the Resolution Foundation thinktank and the London School of Economics said the UK was neither used to nor prepared for the challenges posed by the aftermath of Covid-19, Brexit, the net zero transition, automation and a changing population. – Guardian
A consortium led by Rolls-Royce is in talks to raise £300m for the development of mini nuclear reactors it hopes can make Britain a world leader in renewable energy and power the “green industrial revolution”. The group, UK SMR Consortium, has finalised the design concept for a low-cost “small modular reactor” (SMR) and is now preparing to put it before UK regulators – a process that could take four years. – Telegraph
Amazon is in discussions to acquire the nearly century-old MGM movie studio in what would be its biggest push into entertainment yet, according to reports. MGM, the Hollywood company behind the James Bond series, would help bolster Amazon’s Prime streaming service. Amazon is weeks into negotiations to buy the studio for about $9bn (£6.4bn), according to Variety. MGM and Amazon declined to comment. – Telegraph
Britain’s fifth largest accountancy firm is planning to allow its 5,500 staff to choose when they work at the office after the pandemic. BDO, which has 18 offices nationwide, said that it would allow staff to work where they were most productive, which the company expects to result in a mix of the office, home and client sites for the majority of employees. – The Times
The future of the head of Pendragon looks precarious after a leading shareholder in the motor dealer called his executive bonus bonanza “out of tune” in the present environment. Anders Hedin, a specialist Swedish investor in automotive businesses, holds 13.7 per cent of the shares in Pendragon, the company behind the Stratstone and Evans Halshaw showroom franchises. That makes him the third largest Pendragon shareholder behind Teleios, the European activist investor, and Crispin Odey, the hedge fund manager. – The Times
