Stocks in London made a soggy start on Tuesday, with miners dragging the blue-chip FTSE 100 lower, although Compass bucked the weaker trend.
The FTSE 100 index traded down 30.93 points, or 0.4%, at 8,167.85. The FTSE 250 was down 25.12 points, 0.1%, at 21,113.56, while the AIM All-Share was down 1.55 points, 0.2%, at 781.69.
The Cboe UK 100 was down 0.4% at 815.65, the Cboe UK 250 was 0.2% lower at 18,434.09, and the Cboe Small Companies was up 0.2% at 17,354.17.
The CAC 40 in Paris fell 0.3%, while Frankfurt’s DAX 40 traded 0.4% higher.
Miners Glencore, Anglo American and Rio Tinto weighed on the FTSE 100, as investors track developments in China, a key region for the minerals sector. Glencore was down 1.7%, Anglo fell 1.4% and Rio lost 1.3%. The latter fell despite HSBC raising it to ’buy’.
In China, the Shanghai Composite traded down 0.7% on Tuesday. The Hang Seng in Hong Kong was 0.5% lower. Stocks struggled despite the People’s Bank of China announcing a rate cut at the start of the week. Focus also remains on the closely watched third plenum of leaders in China.
‘Officials seem to be hoping that this will help provide support to the housing market and catalyse more corporate borrowing, supporting overall growth. That looks a high bar to clear though given the weak Q2 activity data (specifically household consumption) and the continuing slide in credit extension. Like the Plenum, the rate cut decision is unlikely to move the growth or inflation dial,’ analysts at Lloyds Bank commented.
Back among London’s large-caps, contract caterer Compass was 3.2% higher. It said ‘industry trends remain strong’ as it reported an increase in revenue and raised growth guidance. In the third quarter ended June 30, organic revenue rose 10%.
‘As expected, net new business growth accelerated in Q3, whilst pricing moderated in line with inflation. Volumes continued to benefit from the quality of our offer and the value gap compared to the high street,’ Compass said.
Compass added: ‘We are pleased with our third quarter performance. The group delivered good growth across all regions and benefited from improved net new business in line with our expectations. For the full year we now expect underlying operating profit growth to be above 15% on a constant-currency basis with organic revenue growth above 10%.’
It had previously expected underlying operating profit growth ‘towards 15%’ and an organic revenue rise ‘towards 10%’.
Over in Frankfurt, SAP pushed 6.0% higher. It backed its 2024 guidance but raised its 2025 outlook.
For 2025, SAP now expects non-IFRS operating profit of approximately €10.2 billion up from around €10 billion before. The firm expects cloud revenue of more than €21.5 billion and total revenue of more than €37.5 billion.
At the other end of the DAX 40, however, Porsche fell 5.3%. It lowered its sales outlook for 2024, citing supply shortages.
The Stuttgart, Germany-based sports car manufacturer now expects sales revenue of between €39 billion and €40 billion, its outlook trimmed from a €40 billion to €42 billion range. This is still up at least 22% from revenue in 2023 of €31.84 billion.
Porsche said the outlook reduction is due to a ‘significant supply shortage with regard to special aluminium alloys’.
‘The supply shortage is the result of the flooding of a production facility of an important European aluminium supplier who has informed its customers in writing of the occurrence of a force majeure event. Affected are body components made of aluminium, which are used in all vehicle series manufactured by Porsche,’ it explained.
The pound traded at $1.2914 early Tuesday, flat from $1.2913 at the time of the London equities close on Monday. Against the dollar, the euro faded slightly to $1.0878 from $1.0881. Versus the yen, the dollar faded to JP¥156.37 from JP¥156.88.
US Vice President Kamala Harris appeared poised to clinch her party’s presidential nomination after receiving support from enough Democratic delegates Monday, as she launched a blistering campaign against Donald Trump.
The formal nomination process for a US presidential candidate occurs when delegates from across the US gather to officially anoint a nominee chosen by voters during the primaries.
But when President Joe Biden dropped out of the race on Sunday, the fate of those delegates, who had been slated to vote for him, came into question.
With the support of a slew of Democratic heavyweights, including Biden himself, and massive voter donations, Harris quickly closed in as the Democratic Party’s heir apparent, and delegates began falling in line to pledge their support.
‘Tonight, I am proud to have secured the broad support needed to become our party’s nominee,’ Harris wrote in a statement, after US media reported she had sailed past the number of delegates needed – 1,976 out of nearly 4,000 – in order to decisively secure the Democratic presidential nomination during voting in the coming weeks.
In New York on Monday, the Dow Jones Industrial Average ended up 0.3%, the S&P 500 added 1.1% and the Nasdaq Composite jumped 1.6%.
Google owner Alphabet and electric carmaker Tesla report after the closing bell in New York on Tuesday. Aside from offering some direction for major stock indices, the earnings could provide some impetus to foreign exchange markets, ING analysts said.
‘In very quiet FX markets, one theme is whether US tech stocks can return to the highs after a rocky month. Alphabet and Tesla report after the bell today and decent earnings should stand to keep benign FX conditions in play,’ analysts at the Dutch bank explained.
The Nikkei 225 in Tokyo ended a touch lower, while the S&P/ASX 200 in Sydney ended up 0.5%.
Brent oil was quoted at $82.41 a barrel, up from $82.15 at the time of the London equities close on Monday. Gold was quoted at $2,394.41 an ounce, down against $2,397.10.
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