Stock prices in Europe opened in the red on Tuesday as the FTSE 100 faded amid a softer start for miners.
Mining firms climbed on Monday amid hopes of a China economic bounce back next year, but returned some progress on Tuesday. Anglo American was 2.2% lower, Glencore fell 2.1% and Antofagasta lost 2.0%.
The FTSE 100 index traded down 38.21 points, 0.5%, at 8,313.87. The FTSE 250 was up 87.63 points, 0.4%, at 20,961.64, and the AIM All-Share was down 1.51 points, 0.2%, at 739.34.
The Cboe UK 100 was 0.5% lower at 834.37, the Cboe UK 250 was down 0.5% at 18,453.42, and the Cboe Small Companies was flat at 16,325.70.
The CAC 40 was down 0.4% in Paris. The DAX 40 in Frankfurt was 0.2% lower.
The pound faded to $1.2747 early Tuesday, from $1.2785 at the time of the London equities close on Monday. The euro declined to $1.0546 from $1.0576. Against the yen, the dollar rose to JP¥151.61 from JP¥151.19.
Back in London, Ashtead gave back 7.5%. The industrial equipment supplier cut its annual outlook and plotted a move to a New York primary listing.
It now guides for group rental revenue growth of 3% to 5% for the full-year, its outlook cut from 5% to 8%. Rental revenue in the half-year to October 31 rose 6%. Overall revenue climbed 2%.
Ashtead believes ‘the US market is the natural long term listing venue’. Shifting its primary listing to the US from London ‘is in the best interests of the business and its stakeholders’. It still plans to keep a UK listing.
‘Today Ashtead is substantially a US business, reporting in US dollars, with almost all the group’s operating profit (98% in FY24) derived from North America, which is also the core growth market for the business. The group’s executive management team and operational headquarters are based in the US and the vast majority of the group’s employees reside in North America,’ Ashtead said.
Moonpig shed 10%. It reported a swing to a half-year loss amid tough trading conditions in its Experiences arm. The greeting cards seller and gifting firm backed annual guidance, however. Moonpig’s pretax loss in the six months to October 31 amounted to £33.3 million, swinging from profit of £18.9 million a year prior.
Revenue rose 3.8% on-year to £158.0 million from £152.1 million. Hurting its bottom line, however, Moonpig booked an impairment of goodwill worth £56.7 million, as it now predicts ‘a longer timeline for fully realising the revenue growth potential of Experiences’.
‘Moonpig Group current trading remains in line with our expectations. Growth has been underpinned by consistent strong sales and orders at Moonpig and is supported by steady progression at Greetz. Given ongoing macro headwinds in gifting, trading remains challenging at Experiences and we remain focused on delivering our transformation plan. Accordingly, our expectations for full year revenue remain unchanged,’ Moonpig said.
‘Our business is well positioned to deliver sustained growth in revenue, profit and free cash flow, driven by our continued focus on data and technology. With respect to the medium-term, we continue to target double digit percentage annual revenue growth.’
Moonpig announced a maiden interim dividend of 1.0 pence per share.
South32 fell 2.9%. It has withdrawn its production guidance for Mozal Aluminium due to civil unrest in Mozambique.
The Perth-based mining group indicated it has implemented contingency plans to mitigate operational impacts, adding it is working with relevant stakeholders.
Mozambique has been rocked by unrest since an October 9 presidential election, won by the Frelimo party. The opposition claims the election was rigged.
South32 said that due to escalating civil unrest in Mozambique, the transport of raw materials to Mozal Aluminium is being impacted by road blockages.
On the up, Porvair added 4.9%.
The environmental and specialist filtration technology company expects revenue growth of around 9% for the year ended November 30, with ‘adjusted earnings per share marginally ahead of market expectations’.
A barrel of Brent fell to $71.99 early Tuesday from $72.43 at the time of the London equities close on Monday. Gold traded at $2,661.94 an ounce, slipping from $2,669.43.
In Asia, China’s Shanghai Composite rose 0.6%. The Hang Seng in Hong Kong lost 0.5%.
Chinese President Xi Jinping warned Tuesday that a trade war with the US would result in ‘no winners’, state media said, ahead of next month’s inauguration of president-elect Donald Trump.
The former US president unleashed a gruelling trade war with China during his first term in office, lambasting alleged intellectual property theft and other ‘unfair’ practices.
He has pledged to impose even higher tariffs on China after taking office next month, just as Beijing is grappling with a shaky post-pandemic economic recovery.
‘Tariff wars, trade wars, and technology wars go against historical trends and economic rules, and there will be no winners,’ Xi said of China-US relations while meeting several heads of multilateral financial institutions in Beijing, according to broadcaster CCTV.
‘China is willing to maintain dialogue with the US government, expand cooperation, manage differences and promote the development of China-US relations in a stable, healthy and sustainable direction,’ said Xi.
Beijing is targeting annual growth this year of around 5%, despite sluggish domestic consumption, high unemployment and a prolonged crisis in the vast property sector.
Xi also said during Tuesday’s meeting that China had ‘full confidence’ of achieving its 2024 growth goal, state media reported.
Chinese exports rose in November at a slower rate than expected while imports shrunk further, official data showed Tuesday, reinforcing the need for more support a day after top officials pledged to bolster the stuttering growth.
Overseas shipments have this year represented a rare bright spot in the Chinese economy, with domestic spending mired in a slump and persistent woes in the property sector spooking investors.
However, observers pointed out that the recent spike in exports could be down to companies ramping up stockpiles amid fears of another China-US trade war when Donald Trump takes the White House next month.
Exports jumped 6.7% on-year to $312.3 billion last month, China’s General Administration of Customs said.
In Tokyo, the Nikkei 225 ended 0.5%, while over in Sydney, the S&P/ASX 200 closed 0.4% lower.
The Reserve Bank of Australia left interest rates unchanged on Tuesday, as expected, but said economic activity was ‘softer than expected in November’.
Australia’s central bank left the cash rate target unchanged at 4.35% and the interest rate paid on exchange settlement balances at 4.25%.
The RBA said it is ‘gaining some confidence’ that inflation pressure is abating, but ‘risks remain’.
In New York on Monday, the Dow Jones Industrial Average fell 0.5%, while both the S&P 500 and the Nasdaq Composite lost 0.6%.
SPI Asset Management analyst Stephen Innes commented: ‘As we edge closer to Wednesday’s CPI data release, the air is still thick with anticipation of a potential quarter-point rate cut on December 18, especially after Friday’s job report showed subtle signs of labour market cooling beneath the surface number.
‘As caution sweeps across the trading floors, investors meticulously trim positions in stocks and bonds, bracing for the pivotal economic updates ahead. This air of caution is palpable, reflecting a strategic response to potential shifts emerging from the impending inflation report that could impact future Federal Reserve decisions.’
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