London midday: Stocks tick higher as investors digest labour market data
London stocks had pushed a little higher by midday, with the pound slipping back against the dollar following a brief pop higher, as investors digested the latest data on UK wages and unemployment.
The FTSE 100 was up 0.3% to 7,540.02, while the pound was flat against the dollar at 1.3187 and up 0.1% versus the euro at 1.1218.
After a mixed labour market release from the Office for National Statistics, IG analyst Chris Beauchamp said: “It’s not been a great week for sterling bulls. First inflation comes in as expected, disappointing those hoping for a bounce in prices, and then the wage gap stays firmly in place. This should send a firm signal to the BoE to not get too excited about possible rate increases.
“A brief spike above $1.32 for cable was reversed as the pair headed back to the lows of the day. It looks like the rally off the October lows has faded away. The FTSE 100 took a brief knock as the pound rallied, but normal service has been resumed, with the index broadly in the same place it was a week ago.”
Official figures released mid-morning showed UK wage growth continues to lag behind inflation, though shifts in the level of employment mean the Bank of England's decision on whether to raise rates in November is "on a knife edge", some economists feel.
Annual growth in average weekly earnings hit 2.2% for the three months to August, on the back of a 2.1% rise a month earlier which revised up to 2.2% by the ONS, while the figure excluding bonuses softened to 2.1% from a revised 2.2%.
Consumer price inflation in August was 2.9% and rose to 3.0% in September, meaning the squeeze on real incomes remained fierce.
The headline ILO unemployment rate for the last three months remained at 4.3%, the joint lowest since 1975, though employment numbers gained 94,000 in the three months to August, the smallest increase since February.
The more timely claimant count rate, showing data for September, remained at 2.3%, with jobless claims rising 1.7K.
In corporate news, AstraZeneca ticked up as it said that it and Merck & Co have been granted priority review by the US Food and Drug Administration for a supplemental new drug application for the use of Lynparza (olaparib) tablets in patients with metastatic breast cancer who have been previously treated with chemotherapy.
Pearson was top of the leaderboard, rallying for a second day thanks in part to price target increases from JPMorgan and Morgan Stanley.
Likewise, British Airways and Iberia parent International Consolidated Airlines Group flew higher as Credit Suisse bumped up its target price on the stock.
Softcat rallied as shareholders lapped up news of a hiked dividend and a jump in annual profit and revenue, while Spectris was firmer after completing the acquisition of privately-held US company Omnicon for an initial consideration of $29m.
Gold miner Hochschild shone after saying it achieved record production levels in the third quarter, while FTSE 250 wealth manager Rathbone Brothers advanced as it reported a jump in assets in the third quarter as inflows grew.
On the downside, Durex maker Reckitt Benckiser was in the red after saying it endured a "soft" third quarter amid a continued challenging market and downgrading its full year guidance.
Rio Tinto fell after being slapped with a £27.4m fine by the City watchdog for failings in its financial reporting process relating to the $3.7bn purchase of mining assets in Mozambique, an issue that US regulators have now begun to investigate.
BHP Billiton edged down after posting a drop in quarterly iron ore output, but saying it still expects to meet full-year production targets.
Sainsbury's was another moving lower, with investors not seemingly impressed by its plans to cut 2,000 jobs.
Market Movers
FTSE 100 (UKX) 7,540.02 0.32%
FTSE 250 (MCX) 20,249.07 0.59%
techMARK (TASX) 3,563.18 0.44%
FTSE 100 - Risers
Pearson (PSON) 682.00p 2.25%
Berkeley Group Holdings (The) (BKG) 3,900.00p 1.77%
G4S (GFS) 280.60p 1.70%
ITV (ITV) 176.50p 1.61%
TUI AG Reg Shs (DI) (TUI) 1,338.00p 1.36%
Coca-Cola HBC AG (CDI) (CCH) 2,630.00p 1.35%
DCC (DCC) 7,270.00p 1.32%
Whitbread (WTB) 4,017.00p 1.31%
Prudential (PRU) 1,844.50p 1.29%
British Land Company (BLND) 615.00p 1.23%
FTSE 100 - Fallers
Merlin Entertainments (MERL) 368.00p -2.57%
Mediclinic International (MDC) 634.00p -1.78%
Rio Tinto (RIO) 3,657.00p -1.58%
Shire Plc (SHP) 3,790.50p -1.22%
Sainsbury (J) (SBRY) 245.00p -1.09%
Reckitt Benckiser Group (RB.) 6,953.00p -0.95%
Anglo American (AAL) 1,450.50p -0.75%
BHP Billiton (BLT) 1,406.50p -0.71%
easyJet (EZJ) 1,308.00p -0.53%
Convatec Group (CTEC) 212.20p -0.47%
FTSE 250 - Risers
Softcat (SCT) 460.70p 4.90%
Hochschild Mining (HOC) 231.70p 4.65%
Greencore Group (GNC) 197.40p 3.62%
Dixons Carphone (DC.) 188.30p 3.18%
Smith (DS) (SMDS) 486.00p 2.94%
BTG (BTG) 748.00p 2.89%
Capital & Counties Properties (CAPC) 270.30p 2.85%
Spire Healthcare Group (SPI) 236.90p 2.69%
Travis Perkins (TPK) 1,479.00p 2.49%
Acacia Mining (ACA) 184.50p 2.05%
FTSE 250 - Fallers
Provident Financial (PFG) 869.50p -4.20%
Nostrum Oil & Gas (NOG) 392.10p -3.19%
GCP Infrastructure Investments Ltd (GCP) 124.50p -1.43%
Elementis (ELM) 277.60p -1.35%
Mitchells & Butlers (MAB) 249.30p -1.15%
Millennium & Copthorne Hotels (MLC) 570.00p -0.87%
Hikma Pharmaceuticals (HIK) 1,174.00p -0.68%
Card Factory (CARD) 319.10p -0.62%
Petrofac Ltd. (PFC) 420.70p -0.62%
Aldermore Group (ALD) 306.60p -0.55%