Stock prices opened in the red in London, Paris and Frankfurt on Tuesday, as investors await eurozone trade balance and US industrial production data.
The Office for National Statistics reported that UK unemployment, in the three months to the end of October, remained unchanged at 4.3% compared to the three months to the end of September. Growth in average earnings including bonuses picked up to 5.2% from 4.4%, however, easily beating the FXStreet-cited consensus of 4.6%. Average earnings growth excluding bonuses increased to 5.2% from 4.9%, outperforming the consensus of 5.0%.
AJ Bell’s Danni Hewson said it was ‘impossible to ignore the cracks that have been widening in the labour market, with vacancy numbers dropping off month after month. A sluggish economy isn’t exactly providing the fuel for job creation and realised fears about potential tax rises in the Budget have made employers cautious.’
She continued: ‘Today’s official figures do have a few bright spots, including a slight fall in the economic inactivity rate...For workers, getting a bit more in their pockets will be welcome, but it has pushed the door even further closed on the slim chance that the Bank of England might deliver a surprise cut to interest rates later this week.’
The FTSE 100 index opened down 63.74 points, 0.8%, at 8,198.31. The FTSE 250 was down 105.17 points, 0.5%, at 20,707.86, and the AIM All-Share was down 2.23 points, 0.3%, at 727.26.
The Cboe UK 100 was down 0.7% at 823.11, the Cboe UK 250 was down 0.7% at 18,205.49, and the Cboe Small Companies was down 0.1% at 16,051.19.
London Stock Exchange Group was the biggest large-cap winner, up 0.6%.
UBS raised it to ’buy’ on Tuesday morning from ’neutral’, increasing the price target to 13,500 from 11,500 pence.
Bunzl was the biggest loser, down 4.5% despite a generally positive trading update.
The firm said it expects 2024 revenue to be up 3% on 2023 at constant currency, ‘driven by acquisitions’, but either flat or down 1% at reported rates. Moreover, it expects adjusted operating profit in 2024 to represent a strong annual increase at constant exchange rates.
‘Looking ahead, despite uncertainties relating to the wider economic and geopolitical landscape, the group expects robust [CER] revenue growth in 2025...driven by announced acquisitions and slight underlying revenue growth,’ Bunzl added.
Chemring was the FTSE 250’s biggest loser, down 8.7% despite reporting increased earnings.
It declared a final dividend of 5.2 pence, up 13% on-year, also lifting its annual dividend 13% to 7.8p from 6.9p.
Revenue rose to £510.4 million from £472.6 million, while pretax profit increased to £53.3 million from £44.1 million. Looking ahead, it expects 2025 to be in line with expectations.
Goodwin was 250’s runaway leader, surging 15%.
Pretax profit for the first half year rose to £16.7 million from £12.1 million, while revenue rose to £106.4 million from £97.6 million. However, Goodwin declared no interim dividend.
GSTechnologies lost 6.1%.
It said it is ‘extremely well-positioned for the future’ after a ‘period of significant development’ in the form of its first half year.
Its pretax loss narrowed to $110,000 from $737,000 the year before, while revenue surged to $2.2 million from $256,000.
In European equities on Tuesday, the CAC 40 in Paris was down 0.3%, while the DAX 40 in Frankfurt was down 0.2%.
The pound was quoted flat at $1.2693 early on Tuesday in London, compared to $1.2694 at the equities close on Monday. The euro stood lower at $1.0490, against $1.0504. Against the yen, the dollar was trading lower at JP¥153.86 compared to JP¥154.23.
In Asia on Tuesday, the Nikkei 225 index in Tokyo was down 0.2%. In China, the Shanghai Composite was down 0.7%, while the Hang Seng index in Hong Kong was down 0.2%. The S&P/ASX 200 in Sydney closed up 0.8%.
In the US on Monday, Wall Street ended mixed, with the Dow Jones Industrial Average down 0.3%, the S&P 500 up 0.4% and the Nasdaq Composite up 1.2%.
Brent oil was quoted lower at $73.28 a barrel early in London on Tuesday from $73.82 late Monday.
Gold was quoted lower at $2,648.35 an ounce against $2,650.30.
Still to come on Tuesday’s economic calendar, US retail sales and industrial production readings come out this afternoon.
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