Market Analysis

British equities started positively on Tuesday as investors welcomed signs of a stabilizing labor market in the UK.

The FTSE 100 index rose 0.3% by 7:07 GMT, mirroring gains in the mid-cap FTSE 250, which also advanced by 0.3%.

Meanwhile, the pound weakened against the U.S. dollar, trading at $1.2719.

In April, the UK's unemployment rate edged up to 4.4% from 4.3%, contrary to expectations for it to remain unchanged according to a Reuters poll.

Excluding bonuses, British wages grew by 6% in April, slightly below economists' forecast of 6.1%, a metric closely monitored by the Bank of England (BoE) as it deliberates over potential interest rate cuts.

Traders are now pricing in a nearly 60% probability of a BoE rate cut in September, with the central bank's next meeting less than two weeks away.

In individual stocks, Rio Tinto saw a 1.9% decline, leading losses on the FTSE 100, following its announcement of acquiring Mitsubishi Corp's stake in Boyne Smelters (BSL) without disclosing the financial details.

Anglo American dropped 1.4% after Morgan Stanley resumed coverage with an "equal-weight" rating.

In contrast, Oxford Instruments surged 8.1% after reporting full-year results that exceeded expectations, buoying investor sentiment.

Paraphrasing text from "Reuters" all rights reserved by the original author.