Thursday was a big day for UK company updates - including from blue-chips Smiths, Aviva and Flutter - but market focus was on the results of the US midterm elections, which will dictate lawmaking, and therefore monetary policy, for the next two years.
The FTSE 100 index opened down 28.78 points, 0.4%, at 7,277.36. It is down 0.8% so far this week.
The mid-cap FTSE 250 was down 78.92, or 0.4%, at 18,618.97, and the AIM All-Share was down 3.21 points, 0.4%, at 827.92.
The Cboe UK 100 was down 0.4% at 727.74, and the Cboe UK 250 was down 0.3% at 16,099.46, though the Cboe Small Companies was up 0.2% at 12,564.30.
Stocks on the continent also were lower. The CAC 40 index in Paris was down 0.2%, while the DAX 40 in Frankfurt was 0.3% lower.
In China, the Shanghai Composite ended down 0.5%, while the Hang Seng in Hong Kong was 1.2% lower. The Nikkei 225 in Tokyo fell 0.6%, though the S&P/ASX 200 in Sydney closed up 0.6%.
'Most Asian equity markets are trading lower this morning despite gains in US and European markets yesterday. China has lifted its lockdown in Zhengzhou, where iPhone production is located, but has extend lockdown in its fourth largest city Guangzhou as it continues with its zero-Covid policy,' analysts at Lloyds Bank said.
Factory gate prices in China were down annually for the first time in nearly two years last month, as falling global commodity prices made their mark on an economy stifled by strict Covid controls.
The producer price index fell by 1.3% on-year in October, according to the National Bureau of Statistics, pushing it into negative territory for the first time since December 2020. Producer prices had risen by 0.9% annually in September.
Meanwhile, the consumer price index - the main gauge for retail inflation - rose by 2.1% on-year in October, the NBS said, moderating from September's two-year high of 2.8% annual inflation.
The pound was quoted at $1.1558, down from $1.1566 at the London equities close on Tuesday. The euro traded at $1.0078, largely unchanged from $1.0075. Against the yen, the dollar was trading at JP¥145.30, down from JP¥145.49.
US President Joe Biden's agenda hung in the balance early Wednesday, as a predicted Republican wave failed to materialize in congressional elections fought against a backdrop of stubbornly high inflation and fears for US democracy. However, the opposition party still made gains.
The top Republican in the US House of Representatives voiced confidence that his party will seize the lower chamber of Congress from the Democrats after Tuesday's midterm elections.
House Minority Leader Kevin McCarthy, speaking to an election watch party in the early hours of Wednesday, struck a cautiously upbeat note as results showed Republicans were poised to flip the seats necessary to win control, albeit most likely with a smaller majority than experts had forecast.
'It is clear that we are going to take the House back,' McCarthy said to raucous cheers.
While control on Capitol Hill technically still hangs in the balance, early results suggested Republicans indeed were on track to take the 435-member House - but only by a handful of seats, a far cry from their predictions. The Senate remains a toss-up.
Tuesday's election saw a clearer verdict in races for states' governors, with rising Republican star Ron DeSantis winning by a crushing margin in Florida, cementing his status as a top potential White House candidate in 2024.
On the London Stock Exchange, Smiths Group rose 4.9%. The company achieved 'further accelerated growth' in the first quarter ended October.
Organic revenue grew 13% year-on-year.
'This positive start to the year reinforces the group's confidence in its full year guidance of 4% to 4.5% organic revenue growth with moderate margin improvement, balancing strong business momentum with continued macro uncertainty, supply challenges and stronger comparators through the rest of the financial year,' the engineering firm said.
Elsewhere, gains for London-listed large-caps were sparse. Insurer Aviva and gambling firm Flutter fell 1.2% and 0.6%, respectively, despite mostly positive business updates.
Aviva said total life sales in the first nine months of 2022 fell 1.7% year-on-year to £25.78 billion from £26.23 billion. However, General Insurance gross written premiums climbed 10% to £7.2 billion and
Its estimated solvency II shareholder cover ratio, a key measure of its financial strength, fell to 223%, from 234% at the end of the first half. Avvia did note, however, that its 'capital position remains well above top-end of our target range'.
Flutter shares declined despite a guidance boost for its US arm, now the Paddy Power owner's largest business.
US revenue guidance for 2022 was lifted to between $2.95 billion and $3.2 billion. Its previous US revenue outlook range was $2.85 billion to $3.1 billion.
The gambling operator said group third-quarter revenue rose 31% year-on-year to £1.89 billion from £1.44 billion.
'Flutter's successful US strategy is expected to continue but there's an evident gap in their offering of casino products,' commented Lara Martinez, an analyst at research house Third Bridge.
'The key challenge for Flutter is to maintain the current market share. Our experts expect the US market to be significantly more fragmented going forward. BetMGM or other operators may come up with a comparable product on sports.'
Marks & Spencer shares were down 1.8%, despite posting a first-half profit hike.
The retailer said revenue in the half-year ended October 1 rose 8.5% annually to £5.54 billion from £5.11 billion. Pretax profit climbed 11% to £208.5 million from £187.3 million.
'As we enter our traditionally strongest quarter, the business continues to trade well. Trading in the first four weeks of the second half is in line with forecasts, with Clothing & Home sales up 4.2%, Food sales up 3.0% and International up 4.1%,' M&S added.
Elsewhere in the UK retail sector, Next has agreed to buy the brand, domain names and intellectual property of Made.com's operating arm Made.com Design Ltd.
Made.com on Wednesday said it has appointed Zelf Hussain, Peter David Dickens and Rachael Maria Wilkinson of PricewaterhouseCoopers as administrators.
The stock is suspended from trading, with a cancellation expected in 'due course'. Made.com debuted on the London Main Market in June of last year, so lasted less than a year and a half as a listed company.
Next shares were 0.7% lower.
Elsewhere in London, Dignity shares were down 3.4% as the funeral provider's revenue and profit were hurt by 'fluctuations in the death rate'.
Underlying revenue in the 39 weeks to the end of September fell 14% to £204.7 million from £237.0 million a year earlier. Underlying operating profit dropped 68% to £14.1 million from £43.4 million.
'During the third quarter, Dignity's new strategy continues to deliver early promising signs of increases in market share growth despite the previously referenced headcount challenges. That said, underlying revenue and underlying operating profit continued to be impacted by a combination of factors, including fluctuations in the death rate, change in pricing strategy and introduction of a direct cremation service through Dignity's funeral network,' the company said.
PCF Group tumbled 49% as it proposed cancelling its AIM listing.
The company said its PCF Bank unit will not recommence lending. It will at some stage look to sell all or part of its loan portfolio, the London-based company explained.
'The board will continue to explore strategic transactions with bona fide interested third parties, however the directors have now concluded that it is in the best interest of all stakeholders for PCF Bank to commence a process of withdrawing from the UK banking market,' PCF said.
'In light of these circumstances and in order to reduce cost for the company, the board proposes, subject to shareholder approval in a general meeting, to cancel the admission to trading on AIM of PCF's ordinary shares.'
A barrel of Brent fell to $94.92 early Wednesday in London from $97.81 late Tuesday.
Gold was quoted at $1,714.87 an ounce early Wednesday UK time, up from $1,712.35 at the London equities close on Tuesday.
A quiet economic calendar has Irish industrial production data at 1100 GMT.
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