LONDON (ShareCast) - (Sharecast News) - London's stock markets had managed to turn positive by the close on Tuesday after a lower-than-expected inflation report from the United States boosted confidence while investors also mulled the latest UK jobs data.

The FTSE 100 closed up 0.2% at 7,440.47 points, while the FTSE 250 jumped 3.47% to reach 18,536.13.

In currency markets, sterling was last up 1.69% on the dollar, trading at $1.2486, while it inched up 0.15% against the euro to change hands at €1.1495.

"The widely awaited US October inflation print came in lower than expected, both with regards to core and headline inflation, and gave the November equity up leg a strong boost with most indices rising by between 1.5% to 2%," said IG senior market analyst Axel Rudolph.

"The dollar dropped by over a percent, and US yields fell to a seven-week low to below the 4.5% mark as expectations of a top in the rate hike cycle were boosted.

"Fed rate cut expectations have been brought forward to May 2024 with analysts now anticipating to see four rate cuts before the end of next year and rates to come back down to 4.25% to 4.5%."

Consumer inflation slows in US, UK wage growth outpaces inflation

In economic news, the cost of living in the US in October showed a more significant decline than anticipated.

According to the Department of Labor, the consumer price index (CPI) remained steady on a seasonally adjusted basis, contrary to an expected 0.1% increase.

That decreased the year-on-year inflation rate from 3.7% in September to 3.2% in October - slightly below the consensus forecast of 3.3%.

Notably, core CPI, which excludes food and energy prices, rose 0.2% on the month and 4.0% on the year - slightly lower than the prior month's reading of 4.1%.

A decline in energy costs, driven by a 4.9% drop in petrol prices, contributed to the decrease in the headline index, while new vehicle prices dipped slightly.

Conversely, medical care commodity prices increased by 0.4%, and transportation services saw an uptick of 0.8%.

"US inflation continues on a downward trend," said Richard Garland, chief investment strategist at Omnis Investments.

"This should reaffirm the Fed's view that interest rates are restrictive enough to bring inflation back to target, albeit they will keep rate hikes on the table until a low 2% inflation handle heaves into view."

On home shores, UK wage growth in the three months through September eased but still outpaced inflation, according to fresh data from the Office for National Statistics.

Average wage growth, including bonuses, fell from 8.2% to 7.9%, surpassing the 6.7% inflation rate.

Excluding bonuses, wage growth also dipped from 7.8% to 7.7%.

Despite the easing, the figures represented some of the highest annual growth rates since records began in 2001.

The unemployment rate remained unchanged at 4.2%, and vacancies decreased by 58,000 to 957,000 in the August-to-October period, declining in most industry sectors.

Payrolled employees increased by 33,000 to 30.2 million, with September figures revised from a decrease to an increase of 32,000.

"Our labour market figures show a largely unchanged picture, with the proportions of people who are employed, unemployed or who are neither working nor looking for a job all little changed on the previous quarter," said ONS director of economic statistics, Darren Morgan.

"The number of job vacancies fell for the 16th straight month; nevertheless, vacancies still remain well above their pre-pandemic levels.

"With inflation easing in the latest quarter, real pay is now growing at its fastest rate for two years."

In the eurozone, third-quarter GDP contraction was confirmed at 0.1%, following a 0.2% increase in the second quarter.

Compared to the same period in 2022, the euro area's GDP expanded by 0.1%.

The figures aligned with analysts' expectations, consistent with preliminary estimates released earlier.

Finally on data, investor sentiment in Germany improved more than expected in November, according to the ZEW investor expectations index, which rose to 9.8 from -1.1 in October, surpassing consensus expectations.

Meanwhile, the current conditions index remained depressed, hovering at -79.8 in September, slightly different from the previous month's reading of -79.9.

Vodafone falls on half-year numbers, DCC closes firmer

In equity markets, Vodafone Group declined 5.23% after reaffirming its full-year guidance but reported a 4.3% decrease in half-year group revenues and a substantial 44% decline in operating profits.

M&G was off 2.36% after a downgrade to 'sector perform' from 'outperform' by RBC Capital Markets.

After reporting challenging market conditions, molten metal flow engineer Vesuvius was off 4.02% but said it remained on track to meet its full-year expectations.

Bank of Georgia Group tumbled 5.34% after the release of its third-quarter results.

On the upside, DCC jumped 12% after it announced the acquisition of Progas, a German distributor of liquefied petroleum gas, for €160m.

DCC also reported a 12% increase in its first-half adjusted operating profit.

Tobacco and vaping giant Imperial Brands reversed earlier losses to close up 0.73%, falling earlier on news that full-year revenues remained flat due to lower tobacco volumes, offset by solid growth in next-generation products (NGP).

Events organiser Informa gained 5.38% after raising its full-year profit and revenue expectations, citing robust growth across its portfolio.

Mining and commodities firm Glencore added 5.17% after announcing a $6.9bn deal to acquire a 77% stake in Teck Resources' steelmaking coal business, Elk Valley Resources (EVR), in Canada's Rocky Mountains.

Oxford Instruments rallied by 7.33% after reporting significant growth in first-half profit, revenue, and its order book, with a particularly strong performance in research and discovery.

ConvaTec Group gained 5.47% after the medical products and technologies group narrowed its full-year sales guidance to the upper end of the expected range.

Land Securities Group rose 6.18% despite a nearly 5% fall in net assets per share in its fiscal first half, attributed to a portfolio write-down of £375m.

The company expressed expectations of increased investment activity in 2024.

Watches of Switzerland Group jumped 7.67% following RBC Capital Markets' price target hike to 950p from 800p and the reiteration of an 'outperform' rating, citing an attractive growth outlook.

Bootmaker Dr Martens advanced 7.11% on the announcement of Giles Wilson as its new chief financial officer.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 7,440.47 0.20%
FTSE 250 (MCX) 18,536.13 3.47%
techMARK (TASX) 4,093.07 0.76%

FTSE 100 - Risers

DCC (CDI) (DCC) 5,248.00p 12.47%
Ocado Group (OCDO) 564.60p 10.10%
Land Securities Group (LAND) 644.40p 6.51%
SEGRO (SGRO) 816.80p 6.44%
Anglo American (AAL) 2,143.50p 5.51%
Informa (INF) 739.40p 5.33%
Unite Group (UTG) 1,003.00p 5.19%
Convatec Group (CTEC) 219.40p 5.18%
B&M European Value Retail S.A. (DI) (BME) 557.80p 5.09%
Barratt Developments (BDEV) 473.00p 5.06%

FTSE 100 - Fallers

Vodafone Group (VOD) 73.11p -5.54%
BAE Systems (BA.) 1,073.00p -3.16%
BT Group (BT.A) 119.55p -2.77%
M&G (MNG) 202.80p -2.31%
Relx plc (REL) 2,896.00p -2.13%
Compass Group (CPG) 2,057.00p -2.05%
GSK (GSK) 1,383.40p -1.69%
Beazley (BEZ) 559.00p -1.58%
London Stock Exchange Group (LSEG) 8,322.00p -1.49%
Smith (DS) (SMDS) 293.20p -1.38%

FTSE 250 - Risers

IP Group (IPO) 50.90p 11.38%
Helios Towers (HTWS) 71.45p 11.29%
Ceres Power Holdings (CWR) 206.00p 10.75%
OSB Group (OSB) 388.80p 10.58%
British Land Company (BLND) 350.50p 9.70%
CLS Holdings (CLI) 100.00p 9.65%
Derwent London (DLN) 2,220.00p 9.47%
Great Portland Estates (GPE) 442.00p 8.33%
Watches of Switzerland Group (WOSG) 618.00p 8.33%
Target Healthcare Reit Ltd (THRL) 86.00p 8.31%

FTSE 250 - Fallers

Bank of Georgia Group (BGEO) 3,375.00p -5.20%
Digital 9 Infrastructure NPV (DGI9) 47.90p -5.15%
Vesuvius (VSVS) 412.40p -2.51%
Capital Gearing Trust (CGT) 4,500.00p -0.44%
Finsbury Growth & Income Trust (FGT) 810.00p -0.25%
Abrdn Private Equity Opportunities Trust (APEO) 445.50p -0.22%
Mitie Group (MTO) 104.80p -0.19%
Syncona Limited NPV (SYNC) 128.00p -0.16%
Baillie Gifford Japan Trust (BGFD) 676.00p -0.15%
BH Macro Ltd. GBP Shares (BHMG) 366.50p -0.14%

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