London open: Stocks hit four-week low on mixed data, Middle East tensions

(Sharecast News) - London stocks dropped to a four-week low on Tuesday morning as mixed economic data from the UK and China, along with rising tensions in the Middle East, hammered investors' appetite for risk. The FTSE 100 fell 1.2% early on to 7,869, with just two stocks in positive territory, putting it on track for its lowest close since 20 March.

Oil prices were rising on Tuesday morning after Israel said it had no choice but to respond to Iran's 300-plus missiles and drones that were launched at the weekend. The initial muted reaction to Tehran's attack had a similarly subdued impact on the markets on Monday, though fears are now rising of a reprisal.

"Missiles into the territory of the State of Israel will be met with a response," said Herzi Halevi, chief of staff of the IDF, lifting Brent crude prices up 0.4% to $90.46 a barrel.

Data comes in mixed

UK markets were also following Asian markets lower overnight, with the Nikkei 225 and Hang Seng both dropping 2% each, after economic data from China underwhelmed. GDP figures for the first quarter beat expectations, with annual growth rising to 5.3% from 5.2%, but standalone data for March showed that growth had started to tail off by the end of the quarter.

Chinese retail sales rose by just 3.1% year-on-year in March after 5.5% growth in February, while industrial production growth slowed to 4.5% from 7.0% - with both figures missing economists' expectations.

Back on home soil, the UK unemployment rate jumped to 4.2% in the three months to February, from an upwardly revised 4.0% in the three months to January, ahead of the 4.0% forecast by the market. However, pay growth was resilient, showing the average earnings growth (excluding bonuses) remained high at 6.0% in February, down just 10 basis points over the month after a particularly strong January.

"Hopes of a May interest rate cut had always appeared to rest on there being a significant downside movement in the February data for pay growth or inflation," said Andrew Goodwin, senior economic advisor to the EY ITEM Club. "Therefore, today's surprisingly strong outturn for pay growth reduces the chances of a May move."

Dr Martens sinks

Shares in Dr Martens plummeted 29% after the bootmaker announced chief executive Kenny Wilson has decided to step down as it issued another profit warning for the current financial year amid continuing woes in the US, its biggest market. The company warned "we could see a worst-case scenario of profit-before-tax of around one-third of the 2024 level".

Financials, industrials and mining stocks dominated the fallers lists, as investors sought safe havens. Savings and retirement business Phoenix Group, high street bank Natwest, industrial peers RS Group and IMI, and miners Anglo American and Rio Tinto were among the worst performers on the FTSE 100.

Meanwhile, just two stocks on the top-tier index - packaging group Mondi and insurer Admiral - were registering gains early on.

QinetiQ Group fell 4% after announcing Carol Borg's departure as group chief financial officer, effective immediately, with Martin Cooper appointed as her successor, expected to join by October.

Market Movers

FTSE 100 (UKX) 7,868.54 -1.22% FTSE 250 (MCX) 19,428.09 -1.37% techMARK (TASX) 4,415.61 -1.09%

FTSE 100 - Risers

Mondi (MNDI) 1,413.00p 0.68% Admiral Group (ADM) 2,718.00p 0.26%

FTSE 100 - Fallers

Phoenix Group Holdings (PHNX) 491.80p -3.28% Auto Trader Group (AUTO) 676.20p -2.45% Experian (EXPN) 3,236.00p -2.35% RS Group (RS1) 692.00p -2.33% IMI (IMI) 1,759.00p -2.28% Scottish Mortgage Inv Trust (SMT) 846.60p -2.26% NATWEST GROUP (NWG) 270.60p -2.24% Anglo American (AAL) 2,121.50p -2.19% Schroders (SDR) 366.80p -2.19% Informa (INF) 790.00p -2.18%

FTSE 250 - Risers

Savills (SVS) 1,076.00p 4.87% Centamin (DI) (CEY) 129.60p 2.61% Hochschild Mining (HOC) 149.20p 1.63% Wood Group (John) (WG.) 142.60p 1.57% Plus500 Ltd (DI) (PLUS) 2,010.00p 1.57% Currys (CURY) 64.35p 0.94% BlackRock World Mining Trust (BRWM) 565.00p 0.71% NextEnergy Solar Fund Limited Red (NESF) 72.05p 0.63% Endeavour Mining (EDV) 1,722.00p 0.58% HGCapital Trust (HGT) 488.00p 0.41%

FTSE 250 - Fallers

Dr. Martens (DOCS) 67.75p -28.65% Auction Technology Group (ATG) 542.00p -13.00% QinetiQ Group (QQ.) 344.20p -3.80% Helios Towers (HTWS) 90.00p -3.74% Hays (HAS) 89.05p -3.73% TUI AG Reg Shs (DI) (TUI) 593.00p -3.42% Inchcape (INCH) 702.50p -3.37% Pacific Horizon Inv Trust (PHI) 594.00p -3.26% Darktrace (DARK) 444.30p -2.86% International Distributions Services (IDS) 220.80p -2.82%