FTSE opens higher on positive UK employment, China production data

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UK stocks opened higher on Tuesday following the release of better-than-expected local unemployment figures, which added to positive Chinese industrial output data.

At 0827, the benchmark FTSE 100 index was up 22.9 points, or 0.4%, at 6,049.15.

The UK unemployment rate rose to 4.1% in the three months to July as expected, up from 3.9% previously, though the claimant count of 73.7K was below market expectations of 99.5k.

Online grocery retailer Ocado was also boosting the benchmark index. It firmed 4.2% to £24.54 on news that its joint venture with Marks & Spencer had grown its third-quarter revenue 52% as people hunkered down at home during the pandemic.

Ocado said the division's strong performance suggested that the entire Ocado group could post annual earnings before interest, tax, depreciation and amortisation of at least £40m, compared to £43.3m last year.

Defence technology products group Chemring rallied 7.0% to 268.5p after it upgraded its annual profit guidance on the back of a buoyant order intake.

Chemring said its adjusted operating profit for the year through October was expected to be towards the upper end of current analyst expectations of £47m-to-£53m.

Bus and rail company FirstGroup advanced 10% to 44.98p as it guided for a small first-half adjusted operating profit, thanks to a stronger-than-expected performance in the four months through August.

FirstGroup also said it remained focused on the sale its North American businesses and was 'encouraged by significant interest from potential buyers.'

Piping systems manufacturer Polypipe jumped 8.7% to 443.5p, despite posting a steep drop in first-half profit and scrapping its interim dividend citing softer trading amid the Covid-19 pandemic.

At the same time, Polypipe said a recovery in its performance was tracking 'well ahead' of an operating scenario laid out in May. It had made 104 positions redundant, fewer than the 250 at-risk positions identified in July.

Landscape products group Marshalls shed 0.8% to 667.5p on swinging to a first-half loss as the pandemic sapped demand, though it, too, said it had seen a better-than-expected recovery in recent months.

Construction support group Mountfield tumbled 37% to 0.6p, having posted a fall in first-half profit after a rise in revenue was more than offset by shrinking margins caused, in part, by a large loss-making contract.

Citing a weaker order book, Mountfield also forecast a 'significant' drop in profit for the full year.

Smart meter installer and manager Smart Metering Systems rose 4.8% to 660.4p after it posted a large first-half profit, having benefited from an asset disposal, and said it would up its dividend by 10% a year.

Smart Metering Systems said it intended to pay a dividend of 25p per share for the 2020 financial year, paid in four instalments starting October, with annual increases of 10% thereafter until the 2024 financial year.

Events and data analytics company Bonhill gained 5.0% to 7.74p on announcing that it continued to trade ahead of expectations after implementing cost-saving measures that boosted margins. Bonhill , however, reported wider first-half losses as revenue fell after live events were cancelled or postponed in the wake of the coronavirus pandemic.