Stock prices in London were mostly higher at midday Tuesday as US voters are choosing their next president, as data showed UK service sector growth softened but outperformed its flash reading in October.
The S&P Global UK services purchasing managers’ index declined to 52.0 points in October from 52.4 in September, but beat the flash score of 51.8 points. The PMI composite output index fell to 51.8 from 52.6, surpassing the flash reading of 51.7 but still hitting its lowest figure since last November.
‘In one line: the PMI shows growth slowed to 0.2% quarter-to-quarter, but should rebound after the [UK government’s] Budget,’ said Pantheon Macroeconomics analyst Elliott Jordan-Doak, adding that the lower reading ‘will give the [Bank of England’s monetary policy committee] further confidence to cut Bank Rate this week and signal further gradual cuts in 2025’.
‘The PMI has been beset by budgetary uncertainty this month, rather than material weakening in economic conditions,’ Jordan-Doak continued. ‘Forward-looking parts of the survey still suggest growth will rebound later in the year, and the chancellor’s expansionary budget should also boost GDP.’
The FTSE 100 index was up 5.34 points, 0.1%, at 8,189.58. The FTSE 250 was up 12.12 points, 0.1%, at 20,473.41, and the AIM All-Share was down 0.16 points, less than 0.1%, at 735.21.
Among larger stocks, Schroders lost 14%.
It reported a rise in assets under management in the third quarter, but said net flows from joint ventures and associates turned negative after a positive start to 2024.
AuM reached a new high of £777.4 billion on September 30 as £6.0 billion in positive market, foreign exchange and investment performance outweighed £2.3 billion in net outflows. Said outflows were partly due to market volatility in China.
AJ Bell’s Russ Mould said that despite having previously fared better than its peers, ‘there are signs Schroders is now feeling the heat based on the significant quarterly outflows unveiled today – the highest since the onset of the pandemic. Perhaps more worryingly there is the promise of more to come.’
The Cboe UK 100 was down 0.1% at 820.44, the Cboe UK 250 was marginally lower at 18,063.39, and the Cboe Small Companies was down 0.1% at 16,367.14.
In smaller companies, perhaps the biggest news was Asos, which lost 8.9%.
The London-based online-only fashion retailer said its annual pretax loss widened to £379.3 million, as revenue fell by 18% to £2.91 billion.
On the plus side, Asos said it met its targets for its ’back to fashion’ turnaround programme, and anticipates a ‘significant increase’ in full-price sales for financial 2025.
‘This is still not a particularly happy story...Even getting close to reclaiming its past glories remains a very long way off for ASOS,’ Mould remarked. ‘However, if the company can just get back on a sure footing it would be a good start.’
Aferian jumped 80% as it noted sound demand for improvements to video streaming.
The business-to-business video streaming company said it expects to report revenue that is about 20% higher for the six months to its second financial half ending November 30 than the $12.2 million it reported for the first financial half.
Aferian still expects a net debt reduction by the end of the year, ‘as cost savings and working capital initiatives implemented in the first half generate improvements in free cash flow’.
BigBlu Broadband rose 42%.
The broadband service provider confirmed in response to Australian media reports that it is in discussions with Melbourne-based alternative investment manager Salter Brothers for a deal involving subsidiary SkyMesh.
Sydney-based newspaper Australian Financial Review on Tuesday reported that BigBlu entered into exclusive terms to fully sell SkyMesh to Salter Brothers.
In European equities on Tuesday, the CAC 40 in Paris was up 0.1%, while the DAX 40 in Frankfurt was up 0.1%.
The pound was quoted at $1.2990 at midday on Tuesday in London, higher compared to $1.2972 at the equities close on Monday. The euro stood at $1.0896, up against $1.0889. Against the yen, the dollar was trading at JP¥152.17, higher compared to JP¥151.94.
Stocks in New York were called higher. The Dow Jones Industrial Average was called up 0.2%, the S&P 500 index up 0.2%, and the Nasdaq Composite up 0.4%.
As voting begins on the extremely tight US presidential race, with election results expected Thursday in the best-case scenario, concerns abound that today’s vote will not produce a clear winner and the results will be contested.
‘Investors should prepare for potential market volatility in the weeks following the election if there are delays in certification, which could extend into [mid-December],’ Jefferies analysts wrote. ‘ It’s advisable to monitor key dates, such as [December] 16 for courts to make final decisions on any disputes.’
AJ Bell’s Mould, meanwhile, said: ‘A contested election result could cause volatility on the markets which theoretically would see defensive stocks provide some portfolio ballast. Equally, a clear winner quickly after voting ends could provide some relief to investors and keep markets trucking along.
’Whether that remains the case a few days later is uncertain as investors haven’t priced in a particular win yet, and there will be good and bad points to digest for markets if either Donald Trump or Kamala Harris wins.‘
Brent oil was quoted at $75.34 a barrel at midday in London on Tuesday, continuing to rise from $74.70 late Monday.
Gold was quoted up at $2,741.88 an ounce, higher against $2,735.26.
Still to come on Tuesday’s economic calendar amid the ongoing US presidential election are a US PMI, trade balance and other releases.
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