UK indices slipped into the red on Tuesday as the London exodus continues, with Ashtead unveiling plans to shift its primary listing to the US.
The FTSE 100 index closed down 71.72 points, 0.9%, at 8,280.36. The FTSE 250 ended down 75.33 points, 0.4%, at 20,973.94, and the AIM All-Share shed 3.28 points, 0.4%, at 737.57.
The Cboe UK 100 ended down 0.8% at 831.35, the Cboe UK 250 closed down 0.5% at 18,461.26, and the Cboe Small Companies ended 0.2% lower at 16,292.64.
China‘s exports rose 6.7% year-on-year in November, official data showed, while imports declined by 3.9%, the most since February. Both metrics missed analyst forecasts of 8.7% and 0.9% respectively.
Citi expects export momentum in China to persist in the short term, particularly as exporters rush to fulfill orders ahead of President-elect Trump’s inauguration.
‘However, we remain cautious on the economic outlook, with external risks looming ahead,’ it added.
‘The larger-than-expected slowdown in imports may suggest that domestic demand has yet to respond to the current round of stimulus, and more policy efforts may be needed to stabilize the economy,’ Citi stated.
The weak data saw miners in the red, with Antofagasta down 3.5%, Glencore down 2.6% and Anglo American down 1.3%.
In European equities on Tuesday, the CAC 40 in Paris ended down 1.1%, while the DAX 40 in Frankfurt ended down 0.1%.
In New York, stocks were mixed at the time of the London close. The DJIA was down 0.1%, the S&P 500 index was 0.1% higher, and the Nasdaq Composite 0.1% lower.
Google-parent Alphabet rose 3.7% reflecting investor confidence following the company’s unveiling of its new quantum computing chip, Willow.
Chief Executive Sundar Pichai introduced the chip on Monday, highlighting its ability to significantly reduce computational errors and its performance in benchmark tests.
US inflation figures are due on Wednesday.
According to consensus cited by FXStreet, annual consumer price inflation is expected to accelerate to 2.7% in November from 2.6% in October.
Stephen Innes at SPI Asset Management noted with the Federal Reserve in the ‘blackout’ period before the critical rate decision next week, the spotlight is squarely on this week‘s CPI data.
‘Market consensus is leaning towards another stubbornly high 0.3% increase in core CPI month-on-month. Although this isn’t ideal, it’s unlikely to sway the Fed from proceeding with a planned 25 basis point cut in December. However, a spike to 0.4% in the core CPI could dramatically shift perspectives, challenging the wisdom of rate reductions amidst escalating inflationary pressures, particularly with the impending tariff adjustments under the incoming Trump administration.’
Ahead of the CPI print, the US dollar was in demand. The pound was quoted lower at $1.2748 at the London equities close on Tuesday, compared to $1.2785 at the close on Monday.
Meanwhile, the euro slumped ahead of the European Central Bank meeting on Thursday. It stood at $1.0507 down against $1.0576 at the same time on Monday.
‘As for the euro, all eyes are now on the aftermath of the [European Central Bank’s] rate decision. Lagarde’s upcoming press conference could hint at further easing, potentially setting a dovish stage for the EUR,’ SPI’s Innes remarked.
Berenberg’s Holger Schmieding expects the ECB will most likely cut its key policy rate, the deposit rate, by 25 basis points to 3.0%.
If so, the ECB would deliver the fourth such cut since the bank had belatedly started to back away from its overly restrictive stance in June, he noted.
‘Amid elevated uncertainty, the ECB is unlikely to provide any clear guidance on the pace and extent of its further monetary easing thereafter. As before, the ECB will likely repeat its mantra that it all ’depends on the data‘, but likely with a more dovish tilt,’ he suggested.
Against the yen, the dollar was trading higher at JP¥152.02 compared to JP¥151.19 late Monday.
The FTSE 100’s biggest casualty was Ashtead, down 14%.
The industrial equipment rental provider unveiled moves to shift its primary listing to the US alongside worse-than-expected guidance.
Looking ahead, Ashtead now guides for group rental revenue growth of 3% to 5% for the full-year, its outlook cut from 5% to 8% previously, principally as a result of local commercial construction market dynamics in the US.
Full-year profit will be ‘lower than our previous expectations’. Ashtead also expects capital expenditure for the year to be $550 million lower than previous guidance at the mid-point.
The firm, which generates almost all the group’s operating profit from North America, believes that ‘the US market is the natural long-term listing venue’ for the company and that shifting its primary listing to the US from London ‘is in the best interests of the business and its stakeholders’.
Grocers J Sainsbury and Tesco bucked the weaker market trend, rising 1.4% and 1.1% respectively.
Figures from Kantar showed UK grocery sales surged as shoppers continue to stock up on premium products in the run-up to Christmas.
Kantar said Tesco took its highest market share since December 2017, at 28.1%, up from 27.4% a year prior. Its sales grew by 5.2% during the 12 weeks.
J Sainsbury sales increased by 4.7% as its market share improved to 15.9% from 15.6%.
Also in the green, British Land climbed 1.2% as Goldman Sachs upgraded to ’buy’ from ’neutral’.
Moonpig shed 15%. 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,’ it said.
‘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.
Brent oil was quoted at $72.65 a barrel at the London equities close Tuesday, up from $72.43 late Monday.
Gold was quoted at $2,690.00 an ounce at the London equities close on Tuesday, up against $2,669.43 at the close on Monday.
Wednesday’s UK corporate calendar has a trading statement from tobacco seller British American Tobacco.
The economic calendar sees US consumer inflation data and the Canadian interest rate decision at 1330 GMT.
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