(Sharecast News) - London stocks had extended gains by midday Tuesday as investors mulled the latest UK jobs data and encouraging comments from US vice president JD Vance about the potential for a trade deal.
The FTSE 100 was up 0.9% at 8,203.79.
Vance said in an interview on Monday with UnHerd that there is a "good chance" the UK and the US can secure a trade deal.
"We're certainly working very hard with Keir Starmer's government," he said.
Sentiment also got a boost after Donald Trump said he was considering temporary exemptions to tariffs on autos and auto parts.
Russ Mould, investment director at AJ Bell, said: "The FTSE 100 made a strong start to proceedings on Tuesday after comments from US Vice President JD Vance that there's a 'good chance' of a UK-US trade deal.
"Suggestions there might also be a softening of tariffs on the motoring sector also helped lift the mood - with names which have sold off most heavily on US trade policy like Rolls-Royce bouncing back. Housebuilders were in demand as slowing UK wage growth raised hopes for a cut to interest rates, which would in turn boost the affordability of mortgages."
On the macro front, figures from the Office for National Statistics showed the unemployment rate was steady in February, while wage growth remained high.
The unemployment rate was unchanged at 4.4% in the three months to February.
The data also showed that growth in annual average weekly earnings excluding bonuses was 5.9%, slightly lower than consensus expectations for 6% growth. Growth in average earnings including bonuses was 5.6%, in line with expectations.
Liz McKeown, director of economic statistics at the ONS, said: "Regular pay growth remains strong having increased slightly in the latest period.
"Growth accelerated in the previous pay rises fully fed through to our headline figures, while pay in the private sector was little changed.
"The latest survey results estimate that the unemployment rate is unchanged on the previous three months, while separately the number of employees on payroll fell slightly over the same period."
Ashley Webb, UK economist at Capital Economics, said: "Overall, while wage growth remains too high, the growing downside risks to inflation and activity from higher US tariffs may mean the Bank of England starts to become less worried about the upside risks to inflation from pay growth and more worried about the downside risks to activity.
"The risk is that interest rates are cut a bit faster than the fall from 4.50% now to 4.00% this year that we expect."
In equity markets, 3i Group shot to the top of the FTSE 100 after Citi lifted its price target on the stock to 4,850 from 4,670p, mainly due to FX, and reiterated its 'buy' rating following the filing of Dutch retailer Action's 2024 annual report.
Tate & Lyle rallied as it said it performed as expected in the fourth quarter and that its 2025 results will be in line with guidance.
Mike Ashley's Frasers Group rose after saying it has entered a long-term strategic retail agreement with Accent Group to launch and operate Sports Direct across Australia and New Zealand.
FirstGroup was in the black after it said that FY 2025 adjusted operating profit and adjusted earnings per share were set to be ahead of its previous expectations following a stronger financial performance in First Rail and an in-line performance at First Bus.
Discount retailer B&M European Value Retail advanced as it said adjusted operating profits should be above the mid-point of its guidance range for the year ended 29 March on the back of productivity gains and a pick-up in underlying sales growth in the fourth quarter.
Burberry was under the cosh after French luxury brand LVHM's first-quarter sales missed expectations.
Domino's Pizza was hit by a downgrade to 'underweight' at Barclays.
Next was boosted by an upgrade to 'buy' at Goldman Sachs, while JD sports was higher after an upgrade to 'euqalweight' at Barclays.
Market Movers
FTSE 100 (UKX) 8,203.79 0.85%
FTSE 250 (MCX) 19,181.79 1.07%
techMARK (TASX) 4,415.02 0.67%
FTSE 100 - Risers
3i Group (III) 4,070.00p 4.25%
Fresnillo (FRES) 1,056.00p 3.53%
BAE Systems (BA.) 1,741.00p 2.84%
St James's Place (STJ) 887.20p 2.69%
SEGRO (SGRO) 662.40p 2.60%
Intermediate Capital Group (ICG) 1,792.00p 2.40%
Halma (HLMA) 2,664.00p 2.38%
Standard Chartered (STAN) 1,011.50p 2.23%
Rolls-Royce Holdings (RR.) 725.40p 2.23%
Taylor Wimpey (TW.) 108.40p 2.22%
FTSE 100 - Fallers
Diageo (DGE) 2,060.00p -2.32%
Smurfit Westrock (DI) (SWR) 3,108.00p -1.18%
Smith & Nephew (SN.) 985.00p -0.81%
Scottish Mortgage Inv Trust (SMT) 874.20p -0.77%
AstraZeneca (AZN) 10,268.00p -0.50%
CRH (CDI) (CRH) 6,536.00p -0.46%
Glencore (GLEN) 259.25p -0.31%
BT Group (BT.A) 165.15p -0.18%
Coca-Cola Europacific Partners (DI) (CCEP) 6,690.00p -0.15%
Unilever (ULVR) 4,688.00p -0.09%
FTSE 250 - Risers
PPHE Hotel Group Ltd (PPH) 1,300.00p 5.69%
Pennon Group (PNN) 492.00p 3.84%
AJ Bell (AJB) 420.20p 3.75%
Ferrexpo (FXPO) 52.60p 3.75%
Discoverie Group (DSCV) 533.00p 3.50%
Frasers Group (FRAS) 637.00p 3.49%
Tate & Lyle (TATE) 521.00p 3.48%
Ocado Group (OCDO) 313.50p 3.19%
Marshalls (MSLH) 263.50p 2.93%
Kainos Group (KNOS) 696.00p 2.88%
FTSE 250 - Fallers
Dr. Martens (DOCS) 51.20p -2.38%
Burberry Group (BRBY) 671.40p -2.19%
Watches of Switzerland Group (WOSG) 354.60p -2.15%
North Atlantic Smaller Companies Inv Trust (NAS) 3,460.00p -1.98%
Energean (ENOG) 812.50p -1.10%
JPMorgan Emerging Markets Inv Trust (JMG) 98.50p -0.91%
The Global Smaller Companies Trust (GSCT) 143.20p -0.83%
Raspberry PI Holdings (RPI) 445.00p -0.71%
Schroder Asia Pacific Fund (SDP) 488.50p -0.51%
VinaCapital Vietnam Opportunity Fund Ltd. (VOF) 398.00p -0.50%
18.08 (0.22%)
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