Stocks in London slipped at the close on Monday, as the FTSE 100 joined European peers in negative territory.
The FTSE 100 index closed down 40.01 points, or 0.5%, at 8,318.24. The FTSE 250 ended down 242.98 points, or 1.2%, at 20,906.60, and the AIM All-Share lost 5.74 points, 0.8%, at 734.95.
The Cboe UK 100 closed down 0.4% at 833.19 on Monday, the Cboe UK 250 ended down 1.1% at 18,461.11, and the Cboe Small Companies fell 0.1% at 16,940.46.
In European equities on Monday, the CAC 40 in Paris and Frankfurt’s DAX 40 both fell 1.0%.
In New York, the Dow Jones Industrial Average was down 0.9%, the S&P 500 was 0.6% lower and the Nasdaq Composite fell 0.5%.
‘Limited data out this week will keep [US] markets focused on two risks: the US election and the upcoming jobs report,’ economists at Citi said.
*With 15 days to go, polls continue to show a very close presidential election. Recent national polls have shifted slightly toward Trump with the Real Clear Politics spread between the two candidates in national polls now less than 1 percentage point. Most swing state polls show a statistical dead heat. Prediction markets have held steady after shifting toward implying a slight advantage for Trump earlier this month.‘
In addition, a raft of corporate earnings will be released stateside from the likes of Boeing, Tesla and Coca-Cola.
The pound was quoted at $1.2984 late Monday afternoon in London, down compared to $1.3040 at the equities close on Friday. The euro stood at $1.0825, lower against $1.0858. Against the yen, the dollar was trading at JP¥150.34, up compared to JP¥149.54.
ING analysts commented: ’FX markets seem to be positioning for a Trump victory in next month’s US presidential election. October seems to have been a good month for Donald Trump in opinion polls and the dollar is bid across the board.‘
Early gains in London came after China’s one-year loan prime rate, which constitutes the benchmark for the most advantageous rates lenders can offer to businesses and households, was cut to 3.1% from 3.35%.
The five-year LPR, the benchmark for mortgage loans, was cut to 3.6% from 3.85%.
But these advances petered out as attention switched to events in the Middle East.
Lebanon’s state-run National News Agency reported heavy clashes in south Lebanon as the Israeli army ’tried to advance‘.
Israel conducted air strikes hitting a Lebanese association linked to Hezbollah, accusing it of financing the group’s weapons as it expanded the scope of its raids beyond military targets.
In southern Lebanon, Israeli strikes hit Al-Qard Al-Hassan branches in the cities of Nabatiyeh and Tyre overnight, according to the NNA.
The renewed hostilities pushed the oil price higher, supporting BP and Shell, up 1.5% and 0.6% respectively.
Brent oil was quoted at $73.85 a barrel on Monday, up from $72.45 late Friday.
Gold continued to climb. The yellow metal was quoted at $2,723.74 an ounce, up against $2,717.31.
Gold and silver miner Fresnillo stormed 6.5% higher while on the FTSE 250 Hochschild Mining advanced 1.3%.
The latter was supported by a well received analyst visit to the firm’s Maria Rose site.
The ’site visit showcased the successful execution of the project and its upside potential. Mara Rosa has a current life of mine of 10 years but with over 2,500 hectares of unexplored land there is potential for resource expansion,‘ analysts at RBC Capital Markets said.
On the FTSE 100, London Stock Exchange firmed 0.8% as Bank of America reiterated a ’buy’ rating. But Intertek fell 3.9% as RBC downgraded to ’sector perform’ from ’outperform’.
Lloyds Banking Group eased 0.8%.
The lender kicks off the UK banking reporting season on Wednesday, releasing a third quarter trading statement.
‘While we don’t expect the same level of growth as we saw in the US, UK banks are expected to report decent results for last quarter,’ commented Kathleen Brooks at XTB Research.
‘Lloyds, the UK’s third largest bank, is expected to report revenues of £4.61 billion, with profits expected to come in at £1.20 billion, both up on the second quarter,’ Brooks said.
Net interest income margin is expected to remain flat in the quarter, between 2.93% to 2.95%, she added.
‘The cost base is also worth watching to see if slowing inflation is having a positive impact on Lloyds costs. Efficiency is key for UK banks right now, as they try to reduce their cost- to – income ratios. A focus on keeping costs as low as possible may help the company to sustain their return on tangible equity above their goal of 13%. We expect loan loss provisions to be stable, and the bank may also say that the loan loss rate has remained low over the quarter. Overall, this could be a steady quarter for Lloyds, even though the macroeconomic backdrop in the UK deteriorated over the quarter.’
On the FTSE 250, Future rallied 7.0% after falling 19% on Friday after Chief Executive Officer Jon Steinberg said he intended to step down later next year, having only joined in April 2023.
JPMorgan remained positive, reiterating an ’overweight’ rating.
‘While the CEO exit is a clear negative and perceived as a set back by many investors who argue it will take time to rebuild confidence in the narrative, we continue to see inherent upside to valuation at these levels and stay constructive with potential for corporate action to stand as a catalyst.’
Hollywood Bowl rose 2.3%. It said it achieved record annual revenue, and it expects profit to land ahead of market expectations.
The ten-pin bowling operator said it expects to report revenue of £230.4 million in the six months to September 30, up 7.2% on-year. UK revenue alone rose 3.8%, it said, while at constant currency, Canada revenue jumped 42%.
Hollywood Bowl expects to post earnings before interest, tax, depreciation and amortisation, on a pre-IFRS 16 basis, ahead of market expectations and above £65.0 million. According to company-compiled consensus, market expectations stand at £64.1 million.
XLMedia jumped 28%. The London-based sports digital media company proposed a deal to sell its North America business to Sportradar AG for up $30 million in cash, with $20 million of that coming on completion.
Tuesday’s economic calendar sees UK public sector borrowing data and Canadian PPI figures.
In the local corporate calendar, Intercontinental Hotels Group releases a trading statement and Virgin Wines reports full-year results.
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