London midday: Stocks turn lower as investors mull jobs data, eye inflation readings

(Sharecast News) - London stocks had turned negative by midday on Tuesday as investors mulled the latest jobs data and looked ahead to key UK and US inflation figures this week. The FTSE 100 was down 0.2% at 8,192.21, while sterling was up 0.1% against the dollar at 1.2785 after figures from the Office for National Statistics showed the unemployment rate fell unexpectedly in June, while wage growth slowed.

The unemployment rate declined to 4.2% from 4.4% in May, coming in below expectations of 4.5%.

The data also showed that growth in average earnings excluding bonuses fell to 5.4% from 5.8% in May and versus expectations of 4.6%. This marked the slowest pace of growth since May to July 2022.

Including bonuses, average earnings grew 4.5% in June, down from 5.7% and below expectations of 4.6%.

Richard Hunter, head of markets at Interactive Investor, said the drop in average earnings was "promising news in the battle against inflation".

He added: "The numbers go some way in justifying the Bank of England's recent decision to cut interest rates given a relatively stable economy, although the timing and amount of the next cut is up for debate, swinging from a possible November reduction to nothing further this year at all."

Investors were also digesting the latest data from retail analyst Kantar, which showed that grocery inflation in the UK rose in the four weeks to 4 August for the first time since March last year.

Supermarket prices rose 1.8% on the same period a year earlier, up slightly from 1.6% in July.

Fraser McKevitt, head of retail and consumer insight at Kantar, said: "Having reached its lowest rate in almost three years in July, August saw inflation nudge up again slightly. While this is noticeable following 17 straight months of falling rates, it actually marks a return to the average levels seen in the five years before the start of the cost of living crisis.

"With this kind of pricing spread, shoppers will find that the type of product they're putting in their baskets will really dictate how much they pay."

In equity markets, Just Group surged as it posted a 44% jump in underlying operating profit for the first half to £249m, which was ahead of consensus expectations. It also said it now expects to "substantially exceed" previous 2024 guidance of doubling 2021's £211m operating profit in three years.

Specialty chemicals firm Synthomer also rose sharply after interim results.

Bridgepoint rallied after an upgrade to 'overweight' from 'neutral' at JPMorgan. "The current low circa 11x 2026E price-to-earnings is an attractive entry point, with the shares offering upside both from earnings growth and rerating potential," JPM said in a research note.

On the downside, Flutter Entertainment slumped ahead of second-quarter results later in the day. UBS said that following US peer DraftKings' downgrade of its EBITDA guidance and "well telegraphed taxation headwinds in the US there is material uncertainty over whether Flutter will be able to reiterate their FY24 US aEBITDA guidance".

Dowlais was in the red as the GKN Automotive owner said it was considering a potential sale of its Powder Metallurgy business and that it now expects a decline in full-year revenue.

Genuit - formerly Polypipe - fell as it posted a drop in first-half profit in a subdued market.

Market Movers

FTSE 100 (UKX) 8,192.21 -0.22% FTSE 250 (MCX) 20,677.42 0.00% techMARK (TASX) 4,791.33 -0.49%

FTSE 100 - Risers

Sainsbury (J) (SBRY) 274.40p 1.78% Standard Chartered (STAN) 730.60p 1.19% Tesco (TSCO) 336.50p 0.90% Persimmon (PSN) 1,589.00p 0.73% National Grid (NG.) 984.80p 0.65% Phoenix Group Holdings (PHNX) 541.50p 0.65% United Utilities Group (UU.) 995.00p 0.63% SSE (SSE) 1,888.00p 0.53% Rentokil Initial (RTO) 471.20p 0.47% Severn Trent (SVT) 2,525.00p 0.44%

FTSE 100 - Fallers

Flutter Entertainment (DI) (FLTR) 14,135.00p -3.75% Marks & Spencer Group (MKS) 316.70p -2.01% Spirax Group (SPX) 7,580.00p -1.75% Antofagasta (ANTO) 1,848.00p -1.68% Burberry Group (BRBY) 659.80p -1.67% Smith & Nephew (SN.) 1,141.50p -1.25% WPP (WPP) 682.80p -1.07% Centrica (CNA) 125.95p -1.06% Anglo American (AAL) 2,209.00p -1.05% Informa (INF) 799.40p -1.04%

FTSE 250 - Risers

Just Group (JUST) 137.60p 17.21% Bridgepoint Group (Reg S) (BPT) 287.20p 4.44% Direct Line Insurance Group (DLG) 178.20p 1.89% SSP Group (SSPG) 164.00p 1.74% NCC Group (NCC) 153.80p 1.59% Wetherspoon (J.D.) (JDW) 746.50p 1.56% JPMorgan Japanese Inv Trust (JFJ) 532.00p 1.53% Elementis (ELM) 154.00p 1.45% Drax Group (DRX) 653.50p 1.32% XPS Pensions Group (XPS) 320.00p 1.27%

FTSE 250 - Fallers

Genuit Group (GEN) 448.00p -3.66% CMC Markets (CMCX) 313.00p -1.57% HGCapital Trust (HGT) 504.00p -1.56% Victrex plc (VCT) 1,020.00p -1.54% Indivior (INDV) 954.00p -1.40% Hochschild Mining (HOC) 171.20p -1.38% Baillie Gifford US Growth Trust (USA) 189.80p -1.35% IP Group (IPO) 37.00p -1.33% Caledonia Investments (CLDN) 3,515.00p -1.26% NB Private Equity Partners Ltd. (NBPE) 1,580.00p -1.25%