London close: Stocks mixed on latest UK jobs data

(Sharecast News) - London's stock markets closed with mixed results on Tuesday, as investors weighed the latest UK jobs data showing both a slowdown in pay growth and a decline in the unemployment rate.

The FTSE 100 index fell 0.78% to close at 8,205.98 points, while the FTSE 250 edged up slightly by 0.03%, closing at 20,656.14 points.

In currency markets, sterling was last down 0.05% on the dollar to trade at $1.3067, while it gained 0.03% against the euro, changing hands at €1.1850.

"The FTSE 100 in London experienced a slight decline on Tuesday, as a result of a broad decline in the market," said TickMill market strategy partner Patrick Munnelly.

"AstraZeneca's performance weighed on the benchmark index, and the UK's sluggish wage growth solidified expectations for additional interest rate cuts by the Bank of England.

"After experiencing its most successful day in over a month on Monday, the blue-chip FTSE 100 experienced a decline."

Pay growth slows, unemployment rate falls

In economic news, the UK's pay growth slowed in the three months to July, with average earnings rising by 5.1%, marking a two-year low.

The Office for National Statistics (ONS) reported that the unemployment rate fell to 4.1%, a six-month low, meeting economists' forecasts.

While unemployment eased, the labour market showed signs of softening with job vacancies falling by 42,000 from the prior quarter, the 26th consecutive decline, leaving 857,000 open positions - still above pre-pandemic levels.

Additionally, the number of payrolled employees dropped by 6,000 between June and July, though the annual figure showed an increase of 203,000.

"Growth in total pay has slowed markedly again as one-off payments made to many public sector workers in June and July last year continue to affect the figures," said Liz McKeown, director of economic statistics at the ONS.

"Basic pay growth also continued to slow, though less sharply.

"When taken together on a comparable basis, our different measures all show growth in the number of employees over the latest quarter, though annual growth has slowed over the year."

In the retail sector, UK grocery price inflation edged down to 1.7% in the four weeks to 1 September, according to data from Kantar.

Despite the slight dip from 1.8% in the previous period, nearly 60% of households remained concerned about food costs.

Grocery sales grew 3% compared to the same period last year, with Ocado leading the sector for the seventh month in a row, posting a 12.9% sales increase.

Lidl followed with a 9.1% rise, while Tesco, Sainsbury's, and Waitrose all saw moderate gains.

Asda, however, experienced a 5.6% drop in sales.

"This is [households'] second biggest financial worry, only behind home energy bills," said Fraser McKevitt, head of retail and consumer insight at Kantar.

"Retailers have been doing their bit to help shoppers keep the cost of the weekly shop down, and the proportion of sales on promotion increased year-on-year for the 16th month in a row in August.

"More than half of all grocery trips include some kind of deal, and this proportion rises as the trolley gets bigger."

On the continent, inflation in Germany fell to 1.9% in August - its lowest level since early 2021, according to final figures from Destatis.

That marked a decline from 2.3% in July, driven largely by a 5.1% drop in energy prices.

Elsewhere, China's trade surplus widened in August, driven by a surge in exports to their highest level in nearly two years, while imports remained stagnant, underscoring weak domestic demand.

The trade surplus reached $91.02bn, exceeding market expectations and up from $83.90bn in July.

In the energy sector, OPEC lowered its oil demand forecast for 2024 for the second consecutive month, now expecting growth of 2.03 million barrels per day, down from 2.11 million.

The revision was put down to weaker demand from China, which was continuing to weigh on the global oil market.

Centamin leads gold miners higher on takeover deal

On London's equity markets, gold miner Centamin surged 23.85% following news that it would be acquired by AngloGold Ashanti in a £1.9bn deal.

Under the agreement, Centamin shareholders would receive 0.06983 new AngloGold Ashanti shares along with $0.125 in cash per share.

The offer represented a 36.7% premium over Centamin's closing price on Monday.

"Centamin, a gold miner that concentrates on Egypt, experienced an increase in its stock price to the greatest level since October 2020," TickMill's Patrick Munnelly said.

"The transaction will enable [AngloGold Ashanti] to expand its operations in Africa.

"As of the most recent close, Centamin's shares have increased by 20.4% year-to-date."

Other mining stocks also performed well, with Fresnillo up 1.88%, Hochschild Mining rising 2.68%, and Endeavour Mining gaining 1.64%, buoyed by the positive sentiment in the sector.

Wickes Group shares climbed 3.27% despite reporting a drop in interim profits and revenue.

The company backed its full-year profit expectations, noting improving trends.

Ocado Group edged up 0.47%, driven by the data from Kantar showing it was the fastest-growing grocer for the seventh consecutive month.

On the downside, AstraZeneca fell 2.41% after mixed results from a key lung cancer trial.

"According to AstraZeneca, the overall survival in the TROPION-Lung01 trial did not achieve statistical significance," Munnelly noted.

Alpha Group International plunged 9.07% as it announced that CEO Morgan Tillbrook would step down at the end of the year, with Clive Kahn, the current chairman, set to take over in January 2025.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 8,205.98 -0.78% FTSE 250 (MCX) 20,656.14 0.03% techMARK (TASX) 4,854.61 -0.02%

FTSE 100 - Risers

Unite Group (UTG) 985.50p 3.63% JD Sports Fashion (JD.) 140.50p 3.42% LondonMetric Property (LMP) 207.00p 2.37% Fresnillo (FRES) 514.00p 1.88% Vistry Group (VTY) 1,365.00p 1.71% CRH (CDI) (CRH) 6,482.00p 1.41% Land Securities Group (LAND) 663.00p 1.38% Taylor Wimpey (TW.) 160.80p 1.01% SEGRO (SGRO) 890.60p 1.00% Persimmon (PSN) 1,610.00p 0.97%

FTSE 100 - Fallers

Barclays (BARC) 216.70p -3.26% Smurfit Westrock (DI) (SWR) 3,342.00p -3.05% Melrose Industries (MRO) 458.50p -2.88% AstraZeneca (AZN) 12,406.00p -2.41% NATWEST GROUP (NWG) 325.80p -2.40% Croda International (CRDA) 3,880.00p -2.32% B&M European Value Retail S.A. (DI) (BME) 414.90p -2.28% BP (BP.) 397.45p -2.26% Centrica (CNA) 120.00p -2.04% BT Group (BT.A) 140.05p -2.03%

FTSE 250 - Risers

Centamin (DI) (CEY) 146.90p 22.93% Hammerson (HMSO) 30.10p 2.87% Bridgepoint Group (Reg S) (BPT) 324.40p 2.72% Hochschild Mining (HOC) 168.40p 2.68% International Workplace Group (IWG) 174.90p 2.52% Games Workshop Group (GAW) 10,430.00p 2.46% Derwent London (DLN) 2,446.00p 2.43% Genus (GNS) 1,850.00p 2.10% Bellway (BWY) 3,122.00p 2.09% Howden Joinery Group (HWDN) 953.00p 1.98%

FTSE 250 - Fallers

Alpha Group International (ALPH) 2,045.00p -12.98% Indivior (INDV) 736.00p -5.03% Ithaca Energy (ITH) 102.00p -4.85% Harbour Energy (HBR) 261.50p -3.51% Victrex plc (VCT) 943.00p -2.88% Discoverie Group (DSCV) 573.00p -2.88% Trustpilot Group (TRST) 193.00p -2.82% Diversified Energy Company (DEC) 829.00p -2.70% IntegraFin Holding (IHP) 365.00p -2.67% Bakkavor Group (BAKK) 157.00p -2.48%