London pre-open: Stocks to fall after UK jobs data, ahead of payrolls

(Sharecast News) - London stocks were set to fall at the open on Tuesday as investors mulled the latest UK jobs data and looked ahead to the release of the long-awaited US non-farm payrolls reports for October and November.

The FTSE 100 was called to open around 30 points lower.

Figures released earlier by the Office for National Statistics showed unemployment rate ticked higher in October, in line with expectations.

The estimated unemployment rate rose 0.4 percentage points to 5.1% in August to October.

The inactivity rate dipped 0.1 percentage points to 21%.

Wages also continued to grow. Including bonuses, total earnings rose 4.8%, while regular earnings - which excludes bonuses - increased 4.6%.

ONS director of economic statistics Liz McKeown said: "The overall picture continues to be of a weakening labour market. The number of employees on payroll has fallen again, reflecting subdued hiring activity, while firms told us there were fewer jobs in the latest period.

"This weakness is also reflected in an increase in the unemployment rate, while vacancies remained broadly flat. The fall in payroll numbers and increase in unemployment has been seen particularly among some younger age groups."

Looking ahead to the rest of the day, the non-farm payrolls reports for October and November - which were delayed due to the US government shutdown - will be released at 1330 GMT. Retail sales data for October is due at the same time.

Ipek Ozkardeskaya, senior analyst at Swissquote, said: "For jobs and sales, the familiar dynamic applies: 'good news is bad news, bad news is good news'.

"Strong data reduce the case for Federal Reserve (Fed) rate cuts - bearish for stocks and bonds, supportive for the US dollar. Softer data increase the likelihood of cuts, supporting bonds and equities while weighing on the dollar. But data that are too weak would also hurt earnings expectations, making the market reaction a delicate balancing act."

In corporate news, Hollywood Bowl reported a rise in annual core earnings despite a challenging backdrop for indoor leisure as customers splashed out on food and drink at its tenpin centres.

EBITDA for the year to 30 September rose 4.2% to �91.2m. Despite the cost of living crisis the company said there was still "robust demand for multi-generational affordable leisure in UK and Canada".

Centrica announced that its Spirit Energy joint venture has sold its remaining 15% interest in the Cygnus gas field, and all other producing assets in the Greater Markham Area and Southern North Sea.

Centrica said Spirit Energy, jointly owned and operated with Stadtwerke M�nchen, had disposed of its stake to Serica Energy for approximately �98m, including a headline consideration of �57m and the transfer of �41m of decommissioning liabilities. Centrica's 69% share of headline consideration was expected to be �39m.

Elsewhere, the Canadian government has given the green light for Anglo American's $50bn merger with Vancouver-based copper and zinc miner Teck Resources.

Canada's Minister of Industry M�lanie Joly granted regulatory approval for the merger of equals, under the condition that the combined group will spend at least C$4.5bn (�2.5bn) in Canada within five years. The approval follows the vast majority of shareholders endorsing the proposed tie-up last week.