LONDON (ShareCast) - Footsie finished the morning close to the day's high after better than expected unemployment figures lifted sentiment.

The number of people out of work fell by 50,000 between June and August to 2.53m. This put the unemployment rate at 7.9%, down 0.2% from the March to May figure.

Most analysts had expected the figure from the Office of National Statistics to remain steady at 8.1%.

Dr Howard Archer, chief UK economist at IHS, said the figures marked "another set of impressively resilient and healthy labour market data which gives a lift to recovery hopes".

However, he added that the employment figures were being propped up by ongoing restrained earnings growth as well as significant increases in part-time jobs and self-employment.

The morning's other big economic news related to the October meeting of the Bank of England’s Monetary Policy Committee (MPC).

“There were some differences of view between members about the outlook and the likelihood that further easing in policy would be required,” the minutes of the meeting, released this morning, revealed.

Some members of the MPC felt that there was still considerable scope for asset purchases to provide further stimulus. Other members, while acknowledging that asset purchases had the scope to lower long-term yields further, questioned the magnitude of the impact that lower long-term yields on corporate debt and equity would have on the broader economy at the present juncture.

Most economists remain convinced that the central bank will go ahead in any case with a widely expected increase in the size of its asset repurchase programme by £50bn.

Diageo's brew falls a bit flat

Guinness brewer saw organic net sales growth of 5% in the July to September, while volumes were up 2%. Europe remains a problem area for the drinks brands giant, but the US market is resilient and it is achieving fast growth in emerging markets.

The firm is in talks to buy a stake of about 20% in Vijay Mallya’s in a deal that would give it management control of the Indian distiller, according to news agency reports.

Diageo would buy new shares in United Spirits and also purchase part of Mallya’s 28% stake, said the news agencies sources. Diageo would get the right to appoint United Spirits’s Chief Executive Officer and other key managers, while Mallya is expected to remain Chairman, they said.

The Royal Bank of Scotland is set to leave the government insurance scheme that was set up at the height of the financial crisis to protect the company from collapse. Analysts said this could pave the way for RBS to be sold back into the private sector. It is currently 82%-owned by the UK taxpayer after receiving a £45bn bailout in 2008.

There was a flood of mining companies providing third quarter production updates this morning. Anglo-Australian mining giant BHP Billiton saw iron ore output rise year-on-year in the third quarter, but fall from the previous quarter's production levels as a result of the planned shut-down associated with the Inner Harbour expansion project in Western Australia. Iron ore production was up 1% year-on-year but down 3% quarter-on-quarter to 39.8m tonnes.

Xstrata, the Switzerland-based miner which looks set to merge with commodities trader Glencore, said volumes of thermal coal, zinc and lead in concentrate and zinc metal in the third quarter increased year-on-year. Volumes of copper and nickel declined, however.

The third quarter of 2012 was a strong one for mining firm Polymetal International, prompting the company to revise up its 2012 production guidance.

Quarterly gold equivalent production hit a new high of 317,000 ounces, and was up 48% on the corresponding quarter of 2011 and up 7% on the previous quarter of 2012.

Bumi row rumbles on

Financier Nat Rothschild is "completely, 100 per cent wrong" about the controversial deal that could end the feud at Indonesian mining firm Bumi, according to the firm's Deputy Chairman.

Rothschild resigned from the board of Bumi on Monday, saying he had lost confidence in the management's ability to stand up for investors. In his resignation letter he accused the company's Chairman of being "complicit" in oppressing minority shareholders.

Cable & Wireless Communications, already in talks with the Bahrain Telecommunications Company (Batelco) about a possible sale of its Monaco & Islands business unit, has confirmed that it is also in talks regarding a potential sale of its business in Macau. Responding to recent press speculation, the international mobile communications networks operator confirmed it is in discussions with CITIC Telecom International Holdings Limited regarding a potential sale of its 51% shareholding in Companhia de Telecomunicações de Macau (CTM). CITIC is a 20% shareholder in CTM.

Online gaming firm 888 has raised full year earnings guidance after a strong third quarter and a good start to the fourth.

"The final quarter [Q4] has started positively with average daily revenues more than 7% ahead of the strong Q4 2011. A disciplined approach to our costs, and our analytics driven marketing spend proving highly efficient, means we now expect our EBITDA [earnings before interest, tax, depreciation and amortisation] for the full year to be significantly ahead of current market expectations," revealed Brian Mattingley, 888's Chief Executive Officer.

Also motoring higher after a well-received trading update was car dealer Vertu Motors, which served notice to analyst to bump up their full year earnings forecasts after a solid first half of the financial year. Pre-tax profit was up 26.8% to £5.2m (2011 H1: £4.1m). Underlying profit before tax rose 16.3% to £5.0m from £4.3m the year before.

Other markets

The most actively traded contract for Brent crude is virtually unchanged at $113.90 a barrel, down 10 cents on the day.

Gilts are getting the cold shoulder today. The yield on the benchmark 10-year gilt is up 3/5 of a percentage point to 1.89%

FTSE 100 - Risers
Eurasian Natural Resources Corp. (ENRC) 344.70p +4.96%
Kazakhmys (KAZ) 736.00p +3.81%
Vedanta Resources (VED) 1,140.00p +3.73%
Evraz (EVR) 252.60p +3.65%
Anglo American (AAL) 1,867.00p +3.21%
Rio Tinto (RIO) 3,155.00p +3.07%
BP (BP.) 447.20p +2.72%
Tesco (TSCO) 315.25p +2.39%
BHP Billiton (BLT) 1,986.50p +1.92%
Glencore International (GLEN) 345.10p +1.90%

FTSE 100 - Fallers
BAE Systems (BA.) 322.20p -2.10%
Diageo (DGE) 1,754.00p -1.60%
Pearson (PSON) 1,224.00p -1.53%
Bunzl (BNZL) 1,100.00p -1.52%
Compass Group (CPG) 685.00p -1.37%
Prudential (PRU) 859.00p -1.26%
Barclays (BARC) 243.15p -1.20%
Whitbread (WTB) 2,349.00p -1.14%
Babcock International Group (BAB) 959.50p -1.03%
Capital Shopping Centres Group (CSCG) 336.40p -1.03%

FTSE 250 - Risers
Ferrexpo (FXPO) 204.00p +4.88%
Home Retail Group (HOME) 108.40p +4.73%
Talvivaara Mining Company (TALV) 139.20p +4.04%
Lonmin (LMI) 510.00p +3.87%
Cable & Wireless Communications (CWC) 37.50p +3.62%
Inchcape (INCH) 369.00p +3.48%
Centamin (DI) (CEY) 102.20p +2.92%
Ashtead Group (AHT) 354.50p +2.60%
Henderson Group (HGG) 118.90p +2.50%
Kenmare Resources (KMR) 41.10p +2.49%

FTSE 250 - Fallers
Rightmove (RMV) 1,580.00p -3.30%
Close Brothers Group (CBG) 835.50p -3.13%
Brown (N.) Group (BWNG) 298.10p -2.87%
BTG (BTG) 359.60p -2.34%
Interserve (IRV) 372.10p -1.82%
Pace (PIC) 168.30p -1.81%
William Hill (WMH) 336.10p -1.73%
Shaftesbury (SHB) 530.00p -1.58%
TalkTalk Telecom Group (TALK) 175.60p -1.57%
CSR (CSR) 335.80p -1.55%


JH

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