The FTSE 100 declined on Tuesday morning in London as UK wage growth slowed, as expected, ahead of UK consumer and producer price inflation readings on Wednesday.
The FTSE 100 index opened down 25.93 points, 0.3%, at 7,568.98. The FTSE 250 was down 23.52 points, 0.1%, at 19,177.32, and the AIM All-Share was up 1.33 points, 0.2%, at 748.70.
The FTSE 100 was down 0.3% at 756.04, the FTSE 250 was up 0.1% at 16,625.57, and the smaller companies index was up 0.1% at 15,072.05.
The UK unemployment rate for the period from September to November was 4.2%, unchanged from the August to October period. The figure came in line with FXStreet-cited market consensus.
Also in the three months to September, annual growth in average total pay, excluding bonuses, was 6.6%. This in line with market consensus as well and slower than growth in the previous three-month period of 7.3%.
Including bonuses, average pay growth was 6.5%, lower than market expectations of 6.8% and 7.2% in the three months to October.
Nicholas Hyett, investment manager at Wealth Club, commented: ‘Wage growth remains above inflation. That’s good news for workers, but together with rising employment may put the Bank of England off cutting interest rates any time soon. If the economy can function with interest rates at their current level, why cut? That would bode ill for investors - who have bet big on rates falling this year - and could see share and bond prices fall if rate cuts don’t come through as expected.’
There will be some more data for the BoE to digest throughout the week.
On Wednesday, there are UK consumer and producer price inflation readings at 0700 GMT, as well as the house price index.
The BoE will make its next interest rate decision on February 1.
Before that there is the European Central Bank decision on January 25, as well as the US Federal Reserve’s decision on January 31.
In European equities on Tuesday, the CAC 40 in Paris was down 0.7%, while the DAX 40 in Frankfurt was down 0.8%.
Destatis confirmed preliminary data showing that consumer price inflation in Germany accelerated in December. The consumer price index rose by 3.7% in December from a year before, with the annual pace picking up from 3.2% in November.
The pound was quoted at $1.2676 early on Tuesday in London, down compared to $1.2734 at the equities close on Monday. The euro stood at $1.0920, lower against $1.0950. Against the yen, the dollar was trading at JP¥146.11, higher compared to JP¥145.77.
In the FTSE 100, Ocado jumped 5.4% to the top of the index.
The Hertfordshire-based online grocer and warehouse technology firm reported an 11% annual jump in retail revenue to £609.4 million in the 13 weeks to November 26, from £549.3 million. It said this marks the fourth consecutive period of quarter-on-quarter growth.
Looking at its winter period, Ocado said it delivers ‘another record Christmas’ and hit its highest ever level of sales over the peak Christmas trading period.
The company expects overall revenue growth in the mid-high single digits in financial 2024, among ‘sustained volume growth’ led by positive trends in customer acquisition. However, it cautioned that revenue growth is likely to be impacted by lower growth in the average selling price as food price inflation continues to decelerate.
Experian rose 3.0% in early trade.
The Dublin-based consumer credit checker said that it deliver ‘good growth’ in its third quarter, which ended December 31.
Revenue was up 9% at actual exchange rates from ongoing activities and 7% at constant exchange rates, with organic revenue growth of 6%.
For the full-year, Experian now expect full year organic revenue growth to be between 5% and 6%.
On the other hand, Rightmove lost 4.7% in early trade. JPMorgan cut the property portal’s stock to ’underweight’ from ’neutral’.
Rolls-Royce also took a hit, on the back of a stock broker downgrade. Shares in the jet engine maker were down 2.3%, after Berenberg cuts its stock to ’sell’ from ’hold’.
In the FTSE 250 index, Qinetiq rose 6.7%.
The Farnborough, Hampshire-based defence technology company said it delivers a ‘good operational performance’ in its third quarter. It noted organic revenue growth and operating profit margin in line with its expectations.
QinetiQ also said it plans to return up to £100 million to shareholders over 12 months through a share buyback programme.
Trustpilot lost 3.2%.
Investment bank Berenberg said Northzone VI has sold its remaining stake of around 5.2 million shares in Trustpilot. The sale of shares in the Copenhagen-based consumer reviews platform took place through a placing, which was announced on Monday.
Northzone is a venture capital fund that has backed Trustpilot for the past 12 years. It first backed Trustpilot back in 2011 as lead investor in a series A funding round.
In Asia on Tuesday, the Nikkei 225 index in Tokyo was down 0.8%. In China, the Shanghai Composite was closed up 0.3%, while the Hang Seng index in Hong Kong was down 2.2% in late dealings. The S&P/ASX 200 in Sydney closed down 1.1%
In the US on Friday, Wall Street ended mixed. The Dow Jones Industrial Average closed own 0.3%, the S&P 500 up 0.1% and the Nasdaq Composite slightly higher. Markets were closed on Monday for Martin Luther King Jr Day. They will reopen on Tuesday.
Brent oil was quoted at $77.90 a barrel early in London on Tuesday, down from $78.09 late Monday. Gold was quoted at $2,048.44 an ounce, lower against $2,053.53.
Still to come on Tuesday’s economic calendar, there is the eurozone and German ZEW economic sentiment survey at 1000 GMT.
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