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| | London Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  |  |  |  | | Please click on the images to view our interactive charts | | | London close: Stocks end lower ahead of US election, central bank decisions UK stocks dropped on Wednesday amid nervousness ahead of the US elections and interest rate decisions by the Federal Reserve and the Bank of England.
The FTSE 100 closed down 1.04% to 6,845.42 points.
Investor sentiment took a hit after a poll released late on Tuesday by ABC News/Washington Post showed Republican nominee Donald Trump taking a one-point lead over Hillary Clinton.
The added support for Trump comes in the wake of last Friday's news that the FBI is taking another look into the emails of Democratic presidential candidate Hillary Clinton.
"The sudden change in fortunes set in train on Friday has seen investors run for cover amid a realisation that Trump might actually win," said Joshua Mahony, market analyst at IG.
"Historically, the economic path of the US economy has changed little in election years, yet it is the uncertainty that it would create which has many worried."
Meanwhile, the Federal Reserve is set to announce its latest policy decision at 1800 GMT. With the proximity of the elections next week, economists expect the central bank will keep interest rates unchanged.
Investors will be scrutinising the Fed's policy statement for clues on whether a widely-expected rate hike in December is likely following signs the US economy is improving.
"However, with the election outcome once again so uncertain, I wonder whether they'll opt against any reference to the next meeting and simply reiterate the improved economic conditions," said Oanda's Craig Erlam.
"The latter could be taken by the markets that they are overpricing a hike, particularly in the event of a Trump victory."
The US also saw the release of the private payrolls report from ADP. Employers added 147,000 jobs in October, missing expectations for a 165,000 increase. Meanwhile, the September figure was revised up to show 202,000 jobs were added, compared to a previous estimate of 154,000.
Capital Economics said: "In isolation, the weaker than expected ADP figure suggests there is some downside risk to our forecast of a 190,000 increase in non-farm payroll employment, due out this Friday. But given the latest evidence of an improvement in the activity surveys, particularly the employment index in the ISM manufacturing index, we're happy to stick with our existing estimate."
Closer to home, the seasonally adjusted Markit/CIPS UK construction purchasing managers' index edged up to 52.6 in October from 52.3 the month before. A reading above 50 signals an expansion.
Nationwide revealed UK house prices rose 4.6% in October from a year ago to an average of £205,904, slowing from 5.3% growth in September. Compared to a month ago, prices in October were flat following a 0.3% month-on-month rise in September.
Looking ahead, the Bank of England announces its policy decision on Thursday along with its meeting minutes and inflation report. Economists expect no change to interest rates so will be more interested in the policy meeting minutes and inflation report for clues on the next course of action.
Meanwhile, oil prices were under the cosh after data from the Energy information Administration revealed crude inventories rose by 14.4 million barrels in the week ended 28 October, more than the 1.0 million build in barrels expected.
Brent crude plunged 3.03% to $46.72 per barrel and West Texas Intermediate declined 3.07% to $45.27 per barrel at 1627 BST.
In corporate news, retailer Next pushed higher after it trimmed its full-year sales guidance following a drop of almost 6% in third-quarter retail sales but said profits would come in as expected thanks to cutting its cloth more severely.
Housebuilder Persimmon advanced after it said trading in the third quarter following the Brexit vote was "encouraging" but remained cautious about new land investment due to the economic uncertainty brought about by the referendum.
EasyJet jumped after HSBC upgraded its rating on the stock to 'buy' from 'reduce' and lifted the target to 1,150p from 800p.
Asia-focused Standard Chartered was under the cosh for the second day running after its third-quarter results on Tuesday missed expectations.
G4S surged as it said revenue in the nine months to the end of September rose 5.7% from the same period last year.
OneSavings Bank declined despite posting a 13% rise in its nine-month underlying loan book. Traders attributed the move to profit-taking following a strong share price performance in the run-up to the results.
Pharmaceutical company Indivior rallied as it increased its full year revenue guidance to reflect faster growth in the USA and also recorded a $220m charge relating to antitrust litigation currently going through the courts. |
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| Market Movers
FTSE 100 (UKX) 6,845.42 -1.04%
FTSE 250 (MCX) 17,463.46 -0.34%
techMARK (TASX) 3,319.10 -0.39%
FTSE 100 - Risers
Fresnillo (FRES) 1,780.00p 3.61%
Next (NXT) 4,979.00p 3.51%
easyJet (EZJ) 968.00p 2.92%
Randgold Resources Ltd. (RRS) 7,585.00p 2.57%
Associated British Foods (ABF) 2,525.00p 2.02%
Hammerson (HMSO) 556.00p 1.46%
Polymetal International (POLY) 952.00p 1.17%
Smiths Group (SMIN) 1,416.00p 1.07%
Travis Perkins (TPK) 1,380.00p 0.95%
Persimmon (PSN) 1,751.00p 0.81%
FTSE 100 - Fallers
Standard Chartered (STAN) 644.10p -4.34%
Royal Dutch Shell 'A' (RDSA) 2,054.50p -2.86%
Royal Dutch Shell 'B' (RDSB) 2,136.50p -2.84%
Barclays (BARC) 182.05p -2.49%
St James's Place (STJ) 924.00p -2.33%
Experian (EXPN) 1,530.00p -2.17%
Shire Plc (SHP) 4,431.50p -2.12%
National Grid (NG.) 1,028.00p -2.10%
Royal Bank of Scotland Group (RBS) 182.70p -2.09%
Aviva (AV.) 430.20p -1.98%
FTSE 250 - Risers
Indivior (INDV) 350.40p 10.64%
G4S (GFS) 242.80p 10.31%
Smurfit Kappa Group (SKG) 1,873.00p 6.36%
Sports Direct International (SPD) 292.80p 5.97%
CLS Holdings (CLI) 1,575.00p 4.17%
Cranswick (CWK) 2,203.00p 3.43%
Allied Minds (ALM) 344.20p 3.18%
Acacia Mining (ACA) 551.00p 2.61%
NCC Group (NCC) 197.50p 2.58%
JRP Group (JRP) 123.00p 2.33%
FTSE 250 - Fallers
Tullow Oil (TLW) 251.00p -5.28%
OneSavings Bank (OSB) 278.00p -4.70%
Hunting (HTG) 469.30p -4.34%
Shawbrook Group (SHAW) 211.30p -4.26%
Amec Foster Wheeler (AMFW) 420.00p -4.00%
Henderson Group (HGG) 221.30p -3.74%
Weir Group (WEIR) 1,604.00p -3.37%
Aberdeen Asset Management (ADN) 306.00p -3.20%
Polar Capital Technology Trust (PCT) 772.00p -3.14%
Phoenix Group Holdings (DI) (PHNX) 701.50p -3.03% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Heightened US political uncertainty weighs on shares European stocks ended the day lower as worries about the US presidential race crept in after a new poll revealed Republican candidate Donald Trump was in the lead and ahead of the Federal Reserve's rate announcement.
The benchmark Stoxx Europe 600 index was down 1.13%, while Germany's DAX was 1.47% lower and France's CAC 40 was off by 1.24%.
Crude oil futures retreated after figures from the US Energy Information Administration showed a 14.4m barrel a day in US commercial oil stockpiles during the latest week, with West Texas Intermediate down 3.2% to $45.22 a barrel and Brent crude 3.2% weaker at $46.64.
A poll released late on Tuesday by ABC News/Washington Post showed Republican nominee Donald Trump taking a one-point lead over Hillary Clinton.
IG's Joshua Mahony said: "Global stock markets are lower this morning, as US election fears dominate, despite a week's worth of top tier data to contend with. The sudden change in fortunes set in train on Friday has seen investors run for cover amid a realisation that Trump might actually win. Historically the economic path of the US economy has changed little in election years, yet it is the uncertainty that it would create which has many worried.
"Trump is unpredictable, which is part of his allure when compared with a somewhat robotic and scripted Clinton. With the FBI, Wikileaks and now a supposed long lost son of Bill Clinton coming out the woodwork, there is a feeling that the tide is turning against Clinton at the worst possible time."
As far as the Fed rate decision is concerned, Societe Generale expects the central bank to hold fire on rates but signal clearly its intention to hike in December.
"Officials could follow up the reintroduction of the balance of risks language in September by noting in November that they are considering raising rates at the next meeting, similar to the language used last October ahead of the December hike," it said.
In corporate news, container shipping company Moller-Maersk slumped after it reported a 44% drop in third-quarter profit that missed analysts' expectations.
Deutsche Lufthansa flew lower after it said third-quarter sales and adjusted earnings fell.
On the upside, Lundbeck rallied after it posted better-than-expected third-quarter numbers and lifted its full-year revenue and profit forecasts.
Retailer Next pushed higher after it trimmed its full-year sales guidance following a drop of almost 6% in third-quarter retail sales but said profits would come in as expected thanks to cutting its cloth more severely.
Housebuilder Persimmon advanced after it said trading in the third quarter following the Brexit vote was "encouraging" but remained cautious about new land investment due to the economic uncertainty brought about by the referendum.
Ryanair flew higher after reporting a 13% jump in traffic in October to 10.9m customers, as the load factor - which gauges how full the planes are - nudged up to 95% from 94%.
G4S surged as it said revenue in the nine months to the end of September rose 5.7% from the same period last year.
On the data front, Markit's final eurozone manufacturing purchasing managers' index came in at 53.5 in October, up from the flash estimate of 53.3 and September's 52.6.
This marked a 33-month high and signalled the steepest rate of improvement in operating conditions since January 2014. |
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| | US Market Report | | US open: Stocks slump as Trump leads polls, Fed policy decision looms US markets slumped as a recent poll put Donald Trump ahead in the race for the White House, while the Federal Reserve is expected to hold out on raising interest rates at the central bank's meeting on Wednesday.
The Dow Jones Industrial Average fell 0.18% to 18,005.29 points, S&P 500 declined 0.35% to 2,104.26 points and the Nasdaq plunged 0.34% to 5,135.88 points at 1502 GMT.
Oil prices retreated as doubts spread over producers cutting output and as the Energy Information Administration said US crude oil inventories rose 14.4m barrels last week.
Brent crude was down 2.88% to $46.79 per barrel and West Texas Intermediate weakened by 3.09% to $45.79 at 1443 GMT.
A poll released late on Tuesday by ABC News/Washington Post showed Republican nominee Donald Trump taking a one-point lead over Democrat Hillary Clinton.
Naeem Aslam, chief market analyst at Think Markets, said: "What is overshadowing the markets right now is surprise news that Trump has lead in the polls once again and this race for the presidency is going to be tight. Investors have abandoned the ship when it comes to the equity market and it is more about the safe haven trade. Hence we are seeing the volatility index moving higher and precious metal.
"In the short - term, we are expecting markets to continue their downward trend and things could be a lot more vile if Trump becomes the president as stock markets have already shown who they want in office."
He said minutes from the Fed meeting will show whether it will raise interest rates in December, while economic data may not be as important as the central bank could be more focused on the outcome of the election.
The latest policy decision by the Fed is expected at 1800 GMT.
Meanwhile, data from ADP found that private sector employment rose less than expected in October.
Employers added 147,000 jobs last month, missing expectations for a 165,000 increase. Meanwhile, the September figure was revised up to show 202,000 jobs were added, compared to a previous estimate of 154,000.
The report comes ahead of the highly-anticipated non-farm payrolls report on Friday.
In corporate news, shares in electric and driverless carmaker Tesla fell 0.79% after chief executive Elon Musk made a sales pitch on Tuesday for the SolarCity Corp purchase.
Shares slumped 0.6% even though the Alibaba as the Chinese e-commerce giant beats expectations as it reported a 55% rise in second quarter revenue to 34.3bn yuan ($5bn), ahead of the 33.9bn yuan forecast.
Beauty manufacturer Estée Lauder shares declined 3.48% as it also beat quarterly estimates as it earned 84 cents per share, more than the consensus forecast of 80 cents. Revenue rose slightly by 1.05% to $2.87bn.
Shares decreased 0.29% as Time Warner, which AT&T said in October it would buy, reported that revenue rose 6.7% to $3.4bn. |
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| | Broker Tips | | Broker tips: Kaz Minerals, CRH, EasyJet, Ryanair Peel Hunt downgraded Kaz Minerals to 'hold' from 'add' after its third-quarter production report but upped the price target to 275p from 200p as it took a look at the copper sector.
It noted the shares are up 30% in the last month and 180% in the year to date.
"While Kaz Minerals is likely to see strong EBITDA growth in 2017 and 2018 irrespective of the copper price move, in the short - term we believe the shares have run too far."
In addition, Peel said the shares are pricing in much of its anticipated upside in copper prices over the next two to three years.
The brokerage cut its 2016 copper price estimates slightly, with its spot forecast now at $4,760 per tonne compared to 4,836 previously.
Peel Hunt nudged up its price target on hold-rated Antofagasta to 580p from 575p, saying the weaker cable rate offsets lower volumes and a lower target multiple. It left its rating unchanged as the shares look close to fair value.
The brokerage said Atalaya and Central Asia Metals remain its copper 'buy' ideas. It trimmed its target on Atalaya to 175p from 180p due to lower copper prices, but lifted its target on Central Asia to 245p from 225p, pointing out that the cash flows backing the dividends are US dollar-denominated.
CRH was given a boost on Wednesday after Canaccord Genuity upgraded its rating on the building materials business to 'buy' from 'hold' and reiterated a target of €32.00.
Canaccord said recent data suggests that the group's end markets should be enjoying continued positive trading momentum.
Construction lead indicators in some European countries are at "significant post financial crisis highs", the broker said. While the US has seen some weakness in public construction, residential and commercial work remains strong and the "good trend" in US materials pricing is continuing.
"Recent lead indicators suggest that trading, particularly in Europe, has been supportive for management's recent full year guidance," said Canaccord.
"With good trading supporting a fast deleveraging balance sheet, as we enter 2017, the market is likely to increasingly focus on a strengthening balance sheet which offers potential for further acquisitions and investment. Share price has edged lower over the last few months with valuation now looking more attractive."
Canaccord said it reiterates its positive medium-term view on attractive organic growth, deleveraging and acquisitions.
HSBC upped its ratings on budget carriers EasyJet and Ryanair on Wednesday as it took a look at European airlines.
The bank upgraded EasyJet to 'buy' from 'reduce' and lifted the price target to 1,150p from 800p.
It upgraded Ryanair to 'hold' from 'reduce' and raised the price target to €12.00 from €8.50.
"We think the structural challenges facing the European short haul market are widely understood by investors and sentiment should be close to the bottom.
"Among the European low cost airlines, EasyJet and Ryanair are long-term winners in our view, and will see stronger earnings momentum, thanks to more beneficial fuel hedge positions into next year, in contrast to quoted competitors who have substantially benefitted from falling fuel this year."
The bank noted a preference for EasyJet over Ryanair and attributed it to the fact that EZJ is currently trading on consensus margins below its cyclical mid-point, having faced a confluence of challenges from Brexit, terror attacks and operational instability.
Ryanair, on the other hand, is trading above its long-term mid cycle margin, benefiting from the revenue uplifts from its successful repositioning, some two years later than EasyJet saw its margins peak.
HSBC was also keen to highlight the differences between EZJ and RYA and their peers.
"Given their out of the money fuel hedges this year and better hedges into CY17, both easyJet and Ryanair will have considerable fuel cost savings into next year. By contrast, the quoted low cost competitors Wizz and Norwegian, have had more beneficial fuel costs this year and will face fare less benefit from fuel next year."
Ryanair released its traffic stats for October earlier on Wednesday. They showed traffic was up 13% to 10.9m customers, while the load factor - which gauges how full the planes are - nudged up to 95% from 94%. | | |
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