London midday: Stocks stay up as Frasers surges; jobs data in focus

18th Jul 2024 11:20

(Sharecast News) - London stocks were still in the black by midday on Thursday as investors mulled the latest UK jobs data, with Frasers Group pacing the advance after well-received results.

The FTSE 100 was up 0.7% at 8,243.62.

Data released earlier by the Office for National Statistics showed that wages grew at their slowest pace in nearly two years in the three months to May.

Annual pay excluding bonuses was up 5.7%, down from 6% growth in the previous three-month period. This was in line with economists' expectations and marked the slowest pace of growth since September 2022.

Including bonuses, total earnings rose 5.7%, down from 5.9% and also as expected.

Meanwhile, the unemployment rate was steady at 4.4% in May, in line with expectations.

The data also showed that job vacancies fell from 905,000 in the three months to May to 889,000 in the three months to June, leaving them 32% below the peak in May 2022.

Dan Coatsworth, investment analyst at AJ Bell, said: "You only had to listen to what recruitment agencies have been saying for months to know the jobs market has cooled. The latest figures from the ONS confirm this to be the case, with a decline in the number of job vacancies and a slowdown in the number of employees on payrolls.

"That being said, the new Work and Pensions Secretary Liz Kendall calling the state of the labour market 'truly dire' feels a bit excessive and is perhaps more of a dig at the previous government.

"What continues to surprise is how wages have remained relatively strong despite the more fragile employment backdrop. While wage growth has slowed, it is still outstripping inflation. That puts the Bank of England in a difficult situation with its next interest rate decision.

"Yesterday's stronger than expected data on services inflation has already dampened expectations for a rate cut on 1 August and traders only see a 41% probability of it happening. The wage growth data only strengthens the argument for rates to stay where they are, at least for the rest of the summer.

"The Bank of England has a reputation for being conservative in its thinking, and there just isn't enough in the latest round of data to warrant the Monetary Policy Committee breaking trend and cutting now."

Looking ahead to the rest of the day, attention will turn to the latest policy announcement from the European Central Bank at 1315 BST amid expectations it will stand pat on interest rates.

Patrick Munnelly at TickMill Group said: "Traders will closely watch for any comments from officials that may provide insight into future rate cuts. These comments are likely to influence the euro, which reached a four-month high on Wednesday as traders fully priced in a 25 basis-point rate cut by the Federal Reserve in September, following remarks from officials."

In equity markets, Frasers surged to the top of the FTSE 100 as it posted annual profits at the top of guidance, despite a dip in revenues. Adjusted pre-tax profits were boosted by a lack of exceptional items compared to the previous year, and came in at £544.8, a 13% uplift and at the top end of guidance of between £500m and £550m.

Schroders followed close behind after an upgrade to 'overweight' from 'equalweight' by Morgan Stanley.

Private equity and infrastructure investment group 3i gained after saying it had an "encouraging start" to the new financial year, with net asset value (NAV) rising 4% over the first quarter.

Dunelm advanced as the homewares retailer said full-year pre-tax profit was set to be "slightly ahead" of current market expectations of £200m after a strong final quarter.

AJ Bell gained as the investment platform said assets under administration rose 20% on the year in the third quarter to £83.7bn.

Construction firm Kier was up as it said full-year revenue and profit were set to be in line with market expectations as its order book hit nearly £11bn and it hailed a "strong" operational performance.

On the downside, Diploma fell as the distribution group held guidance as revenue grew 13% in the nine months to 30 June.

Babcock was knocked lower by a downgrade to 'hold' from 'buy' at Berenberg.

Market Movers

FTSE 100 (UKX) 8,243.62 0.69%

FTSE 250 (MCX) 21,234.52 0.67%

techMARK (TASX) 4,817.69 0.36%

FTSE 100 - Risers

Frasers Group (FRAS) 895.00p 8.95%

Schroders (SDR) 395.60p 4.99%

WPP (WPP) 741.00p 2.01%

Haleon (HLN) 340.90p 1.88%

JD Sports Fashion (JD.) 118.60p 1.67%

3i Group (III) 3,119.00p 1.66%

Pershing Square Holdings Ltd NPV (PSH) 4,226.00p 1.59%

Unilever (ULVR) 4,530.00p 1.55%

Sage Group (SGE) 1,055.00p 1.49%

Croda International (CRDA) 4,099.00p 1.49%

FTSE 100 - Fallers

Smurfit Westrock (DI) (SWR) 3,619.00p -3.03%

Antofagasta (ANTO) 1,952.50p -2.28%

Flutter Entertainment (DI) (FLTR) 15,545.00p -1.80%

InterContinental Hotels Group (IHG) 8,258.00p -1.60%

Diploma (DPLM) 4,210.00p -1.54%

easyJet (EZJ) 479.40p -1.48%

Intermediate Capital Group (ICG) 2,078.00p -1.33%

Fresnillo (FRES) 623.50p -1.03%

Glencore (GLEN) 454.65p -0.84%

Auto Trader Group (AUTO) 810.20p -0.49%

FTSE 250 - Risers

Ocado Group (OCDO) 380.80p 6.52%

Dunelm Group (DNLM) 1,172.00p 5.97%

AJ Bell (AJB) 417.50p 5.16%

Jupiter Fund Management (JUP) 87.60p 3.30%

Kier Group (KIE) 161.60p 3.19%

Alpha Group International (ALPH) 2,505.00p 3.09%

Bridgepoint Group (Reg S) (BPT) 259.20p 2.86%

Keller Group (KLR) 1,476.00p 2.79%

Trustpilot Group (TRST) 209.00p 2.70%

Close Brothers Group (CBG) 537.00p 2.48%

FTSE 250 - Fallers

Ninety One (N91) 169.00p -3.65%

Indivior (INDV) 812.00p -2.29%

C&C Group (CDI) (CCR) 157.80p -1.99%

Twentyfour Income Fund Limited Ord Red (TFIF) 104.60p -1.88%

Bytes Technology Group (BYIT) 486.20p -1.74%

FirstGroup (FGP) 172.50p -1.65%

Babcock International Group (BAB) 509.50p -1.55%

HarbourVest Global Private Equity Limited A Shs (HVPE) 2,525.00p -1.37%

Foresight Group Holdings Limited NPV (FSG) 504.00p -1.18%

Cranswick (CWK) 4,550.00p -1.09%