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London open: Stocks dip as US mid-term results roll in; M&S, Taylor Wimpey in focus
London stocks dipped in early trade on Wednesday as investors sifted through updates from the likes of Taylor Wimpey and Marks & Spencer, and as results of the US mid-term elections began to roll in.
At 0835 GMT, the FTSE 100 was down 0.3% at 7,284.24.
Oanda market analyst Craig Erlam said: “Equity markets are a little lower on Wednesday as investors continue to watch events unfold in the US for a sense of what impact they’ll have on sentiment.
“The impact of the midterms will probably be short-lived, if impactful at all, as far as markets are concerned. Of course, the political implications may be significant if Democrats can manage to retain control of the House and Senate but at this stage, only one of those looks plausible which means deadlock in Washington.
“The bigger takeaway from the election may well be what support there is for Trump-backed candidates and what that does for his own re-election hopes in two years. But that’s unlikely to sway the markets now, not with so much else to focus on.
“Investors are more focused on the inflation data on Thursday and whether that will pave the way for a slower pace of tightening in December and early next year.”
In equity markets, Aviva was trading down even as it posted a 10% rise in third-quarter gross written premiums and backed its dividend and capital returns guidance.
Flutter Entertainment edged lower despite boosting its forecasts for annual US revenues after a strong third quarter.
ITV was also on the back foot after the broadcaster reported a rise in sales for the first nine months of the year, as its production arm offset a fall in television advertising revenue.
AJ Bell was knocked lower by a downgrade to ‘hold’ from ‘buy’ at Shore Capital.
On the upside, engineer Smiths Group gained as it backed its full-year expectations and said first-quarter growth had accelerated.
Taylor Wimpey advanced even as the housebuilder reported a fall in its sales rate alongside a spike in cancellations as the mounting cost-of-living crisis dented demand.
Food and clothing retailer Marks & Spencer rose after saying it expects to deliver annual results “similar” to expectations as interim pre-tax profits grew 11.3%. Clothing and homewares sales rose 14% in the six months to October 1, while food revenue was up 5.6%. Group revenue increased 8.5% to £5.5bn.
Top 10 FTSE 100 Risers
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Smiths Group Plc | +4.51% | +70.00 | 1,621.50 |
| 2 |  |
Fresnillo Plc | +1.24% | +10.00 | 817.00 |
| 3 |  |
Bae Systems Plc | +1.17% | +9.20 | 796.00 |
| 4 |  |
Associated British Foods Plc | +0.96% | +14.00 | 1,472.00 |
| 5 |  |
Rio Tinto Plc | +0.76% | +39.00 | 5,150.00 |
| 6 |  |
Admiral Group Plc | +0.54% | +10.50 | 1,940.00 |
| 7 |  |
Hikma Pharmaceuticals Plc | +0.53% | +7.00 | 1,320.00 |
| 8 |  |
Carnival Plc | +0.43% | +3.00 | 699.00 |
| 9 |  |
Coca-cola Hbc Ag | +0.43% | +8.50 | 1,982.50 |
| 10 |  |
Bhp Group Limited | +0.41% | +9.50 | 2,325.50 |
Top 10 FTSE 100 Fallers
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Itv Plc | -6.29% | -4.60 | 68.56 |
| 2 |  |
Marks And Spencer Group Plc | -4.19% | -4.90 | 112.15 |
| 3 |  |
Segro Plc | -2.40% | -18.80 | 765.40 |
| 4 |  |
Ocado Group Plc | -2.05% | -14.40 | 689.20 |
| 5 |  |
Whitbread Plc | -1.99% | -51.00 | 2,516.00 |
| 6 |  |
Land Securities Group Plc | -1.96% | -11.60 | 579.00 |
| 7 |  |
British Land Company Plc | -1.84% | -7.00 | 374.20 |
| 8 |  |
Informa Plc | -1.82% | -10.40 | 561.60 |
| 9 |  |
Aviva Plc | -1.77% | -7.70 | 426.20 |
| 10 |  |
Bt Group Plc | -1.70% | -2.00 | 115.45 |
US close: Stocks higher as investors await midterm election results
Wall Street stocks were in the green at the end of trading on Tuesday as polls shut up shop for the 2022 US midterm election.
At the close, the Dow Jones Industrial Average was up 1.02% at 33,160.83, while the S&P 500 was 0.56% firmer at 3,828.11 and the Nasdaq Composite saw out the session 0.49% softer at 10,616.20.
The Dow Jones closed 333.83 points higher on Tuesday, extending gains recorded in the previous session.
Tuesday’s primary focus was the US midterms, the result of which will determine which side of the aisle controls Congress and has the power to steer future policy and spending. Market reactions will almost certainly depend on whether or not Republicans can take back control of the House of Representatives, the Senate, or both.
On the macro front, small business optimism fell to a three-month low in October, according to the National Federation of Independent Business. The NFIB’s small business optimism index fell to 91.3 in October, down 92.1 in September, as 33% of owners stated inflation was their primary concern when it came to operating businesses – up three points from the previous month to make up the highest percentage since the fourth quarter of 1979.
In terms of earnings, Walt Disney posted earnings that fell short of expectations but said its streaming business was at a “turning point”, while AMC Entertainment reported yet another quarterly loss despite seeing revenues improve throughout the period.
Elsewhere, Elon Musk sold off $3.95bn in Tesla stock, according to the Securities and Exchange Commission.
Wednesday newspaper round-up: Meta, London Underground, Companies House
Meta CEO Mark Zuckerberg confirmed to executives that the company will begin laying off employees on Wednesday morning, the Wall Street Journal reported on Tuesday. Zuckerberg addressed hundreds of executives at the company on Tuesday morning, foreshadowing large cuts. He mentioned recruiting and business teams as groups that would see layoffs, according to the WSJ, adding an internal announcement of the company’s layoff plans is expected around 6am eastern time on Wednesday. – Guardian
A strike on London Underground will halt virtually all tube services and slow much of the capital to a crawl on Thursday, in the ongoing dispute over jobs and pensions. Some London Overground and Docklands Light Railway services may also be affected by the 24-hour walkout by members of the Rail, Maritime and Transport Workers (RMT) union, while buses are expected to be extremely busy and roads congested. Elizabeth Line trains will run as normal. – Guardian
Companies House has been accused of being “an enabler of fraud” as figures show tens of thousands of people claim their addresses are being wrongly used to register businesses. Companies House on Tuesday revealed that 40,927 people complained their addresses had been listed as an organisation’s main office without their permission over the past three years. – Telegraph
Elon Musk sold shares in Tesla worth almost $4 billion after completing his takeover of Twitter. The world’s richest person has now sold shares worth almost $20 billion in the electric carmaker since first disclosing a stake in Twitter in the spring. – The Times
The former boss of Denmark’s biggest bank has been cleared in a multimillion-pound civil case that centred on one of the world’s worst money laundering scandals. A group of 155 institutional shareholders had claimed that Thomas Borgen, who ran Danske Bank until 2018, had information about the scandal that should have been disclosed to the stock market in 2014. They sued him for DKr2.4 billion (£280 million), arguing the former chief executive was liable for the losses they had suffered in the fallout from the controversy. – The Times
