British equities struggled to maintain momentum as investors evaluate the latest labor market report from the UK, with the blue-chip FTSE 100 index closing 1.22% lower on Tuesday. Official data indicated an uptick in the unemployment rate to 4.3% in the quarter leading to September, rising from 4% in the previous three-month period, surpassing the expected figure of 4.1%.
Concurrently, average earnings excluding bonuses increased by 4.8% annually, compared to the previous year's 4.9% and the forecasted rise of 4.7%. BofA Global Research highlighted that while the labor market remains tight, signs of easing are noticeable. "We would be cautious in interpreting this jump in unemployment due to the low response rates of the LFS survey and data quality issues (this particular wave of the survey showed 3.7% as unemployment rate three months ago)," stated BofA.
"The BoE is also likely to not read much into this and look at broader surveys which are consistent with a loosening but tight labor market and slowing but positive employment growth." In corporate developments, Convatec Group ($CTEC) experienced a notable boost, trading 22.07% higher after revising its organic sales growth guidance for 2024 to a range of 7.25% to 8%, up from a previous estimate of 6% to 7%.
The medical products and technologies company reported a 7.1% year-over-year sales increase during the first 10 months. "We expect these results to be positively received by investors, with the FY2024 upgrade supported by the broad-based strength across the divisions thus far in the year," remarked RBC Capital Markets. Conversely, Vodafone Group ($VOD) saw a decline of 8.19% in closing trade, following the telecommunications giant's announcement of a reduced interim dividend for the fiscal first half, even after returning to profitability.
Later that day, the company expanded its existing share buyback program. Baader Europe commented that Vodafone experienced a "disappointing" second quarter, attributed to a 9.5% drop in Germany during the six-month period. "We would advise staying away from the stock in the short term despite the 17.5% upside on paper," cautioned the analyst..