UK Shares Rise Following Labor Market Data
British equities traded higher Tuesday, with the FTSE 100 up 0.14% at close, supported by gains in energy shares as rising crude prices offset concerns over geopolitical tensions, while softer labor market data eased expectations of a more hawkish Bank of England.Britain's unemployment rate was stable at 4.9% in the three months to June, unchanged from the three-month periods to May and April, according to the Office for National Statistics. Analysts expected the rate to fall to 4.8%. Average weekly pay, including bonuses, rose 4.1% year over year in the quarter to June, slowing from a revised 4.4% increase in the previous period but exceeding the 4% consensus estimate."Ongoing weakness in private-sector hiring and wage growth suggests the bar is still relatively high for a rate hike in 2026, barring a severe and prolonged spike in energy prices. We expect the Bank of England to remain on hold this year and resume rate cuts from spring 2027," said James Smith, developed markets economist for UK at ING Think.In the US-Iran space, Washington decided not to extend the 60-day truce agreed in June, while top Iranian negotiator Mohammad Baqer Qalibaf warned that the Strait of Hormuz will remain closed until the US agreed to end its blockade of Iranian ports, lift oil sanctions, unfreeze Tehran's assets, and stop threats and military operations on all fronts. Amid waning chances for a lasting US-Iran peace deal, crude prices spiked, driving oil heavyweights like BP (BP.L) and Shell (SHEL.L) up 2.96% and 1.86%, respectively, in the closing session.In corporate news, BHP Group (BHP.L) rose 0.74% following discussions with NexGen Energy about a potential equity partnership in the latter's Rook I mining project in Saskatchewan, Canada, Reuters reported, citing NexGen's Chief Executive Officer Leigh Curyer.Separately, the mining group also reported a yearly rise in attributable profit for the 12 months ended June 30 to $9.83 billion from $9.02 billion on late Monday. Revenue increased to $58.76 billion from $51.26 billion a year ago."[The] timing of [NexGen] article is curious on the eve of BHP's results that will be the first time in charge for Brandon Craig, new CEO, and who may be looking to see the reaction from investors and the company," RBC Capital Markets said. "We would be surprised if the discussions were that serious from an M&A perspective, given the CEO was willing to mention to the press. BHP already have a lot on their plate over the next decade from their copper project pipeline. Even if they have the balance sheet capacity from ongoing iron ore cash flows and further infrastructure swaps, the project team execution will be severely strained in our view. Credibility is already at a low point due to the capex issue at Jansen."
