A so-far indecisive US midterm election took a backseat at midday on Wednesday to company news and worries about the health of the Chinese economy, pushing share prices lower.
Most dramatically, Facebook-owner Meta Platforms announced plans to lay off 11,000 employees. Closer to home, Next has bought the assets of failed furniture retailer Made.com.
Covid-19 worries in China and weaker oil prices combined to hurt the FTSE 100 going into Wednesday afternoon. A cheaper Brent price hurt oil majors, while China concerns hit mining shares. Commodities stocks Shell, BP and Glencore are among the largest London listings.
The FTSE 100 index was down 15.81 points, 0.2%, at 7,290.33 at midday in London. The FTSE 250 was down 78.27 points, 0.4%, at 18,619.62, and the AIM All-Share was down 4.89 points, 0.6%, at 826.24.
The Cboe UK 100 was down 0.3% at 728.83. The Cboe UK 250 also was down 0.3%, at 16,090.73, but the Cboe Small Companies was 0.1% higher at 12,554.87.
Stocks on the continent were lower as well. The CAC 40 index in Paris was down 0.2%, while the DAX 40 in Frankfurt was down 0.5%.
'A continuing slide in oil prices, as initial excitement about a reopening of the Chinese economy has waned, helping to put energy stocks under continued pressure,' AJ Bell analyst Russ Mould commented.
Fears of continued lockdowns as China pursues as zero-Covid policy also hurt oil prices. A barrel of Brent fell to $94.59 midday Wednesday in London from $97.81 late Tuesday.
Shell shares fell 1.4%, while BP was down 0.2%.
Weaker economic progress in China is worrisome for miners as well, as the nation is a big buyer of minerals. Glencore shares fell 1.2%, while Antofagasta lost 1.4%.
Markets have avoided dramatic sell-offs so far this week, but the going has not been easy for equities. The FTSE 100 is down 0.6% since last Friday.
A hotter-than-expected US inflation reading, due on Thursday, could cause more problems for markets, however. US annual inflation is expected to fade to 8.0% in October from 8.2% in September, according to FXStreet cited consensus.
The dollar was on the up on Wednesday.
The pound was quoted at $1.1467 at midday, down from $1.1566 at the London equities close on Tuesday. The euro traded at $1.0059, down from $1.0075. Against the yen, the dollar was trading at JP¥145.72, up from JP¥145.49.
Republican hopes of a 'red wave' carrying them to power in the US Congress faded Wednesday as Joe Biden's Democrats put up a stronger-than-expected defence in a midterm contest headed for a cliff-hanger finish.
With a majority of Tuesday's races called, Republicans seemed on track to reclaim the House of Representatives for the first time since 2018, but the Senate was still in play, with forecasts tentatively leaning Democratic.
Ahead of the US open, the Dow Jones Industrial Average was called down 0.2% and the S&P 500 down 0.1%, but the Nasdaq Composite was pointed up 0.1%.
On the US corporate front, the technology sector continued to dominate the headlines.
Facebook-owner Meta Platforms announced it will lay off 11,000 staff members. This follows new Twitter owner Elon Musk slashing jobs after sealing the acquisition of the micro-blogging site.
Meta boss Mark Zuckerberg said: 'Today I'm sharing some of the most difficult changes we've made in Meta's history. I've decided to reduce the size of our team by about 13% and let more than 11,000 of our talented employees go. We are also taking a number of additional steps to become a leaner and more efficient company by cutting discretionary spending and extending our hiring freeze through Q1.
'At the start of Covid, the world rapidly moved online and the surge of e-commerce led to outsized revenue growth. Many people predicted this would be a permanent acceleration that would continue even after the pandemic ended. I did too, so I made the decision to significantly increase our investments. Unfortunately, this did not play out the way I expected. Not only has online commerce returned to prior trends, but the macroeconomic downturn, increased competition, and ads signal loss have caused our revenue to be much lower than I'd expected. I got this wrong, and I take responsibility for that.'
Meta shares were 3.2% higher in pre-market activity in New York. Shares are down some 30% over the past month, however.
Back in London, Smiths Group rose 3.6%. 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.
A pair of poorly received updates put pressure on the FTSE 250 index.
JD Wetherspoon said like-for-like sales in the early stages of its current financial year are ahead of pre-virus levels, but in the 'last' five weeks, they have declined. Shares fell 5.8%.
The Watford, England-based pub chain said that in the 14 weeks to November 6, like-for-like sales rose 9.6% year-on-year and by 0.4% against a pre-Covid comparative from three years earlier. However, it noted that costs such as labour and food 'were substantially higher'.
In the final five weeks of that period, sales are down 1.1% from three years earlier.
ITV lost 5.3%, as weaker advertising revenue hit its share price.
For the nine months that ended on September 30, the London-based television broadcaster and content producer said total external revenue was £2.52 billion, up 5.9% from £2.38 billion a year ago.
Total non-advertising revenue was £1.62 billion, up 13% from £1.43 billion. This represents over 50% ITV's total revenue.
However, total advertising revenue was down 2.2% to £1.33 billion from £1.36 billion a year ago. For the third quarter alone, total advertising revenue was down 14%.
Would-be advertisers slash budgets in times of economic strife, hurting revenue progress for media firms such as ITV, who offer advertising space.
Elsewhere in London, Gym Group tumbled 11%, as it warned of rising costs.
The low-cost gym operator said it expects utility costs will rise by £8 million to 10 million in 2023 compared to 2022.
It said that in the 10 months to October 31, revenue has jumped 78% year-on-year to £143.2 million from £80.5 million. Membership numbers amounted to 838,000 at the end of October, up 17% from 718,000 at the end of 2021.
Next said it has agreed to buy assets of Made.com out of administration. The clothing and homewares retailer said it will buy the brand name, domain names and intellectual property of Made.com Design, which sells sofas and other furniture, for £3.4 million.
Next shares were trading flat following the news.
Made.com said it has appointed Zelf Hussain, Peter David Dickens and Rachael Maria Wilkinson of PricewaterhouseCoopers as administrators. Its shares have been suspended from trading, with a cancellation expected in 'due course'.
Made.com debuted on the London Main Market in June of last year, so it lasted less than a year and a half as a listed company.
Gold was quoted at $1,708.03 an ounce midday Wednesday UK time, down from $1,712.35 at the London equities close on Tuesday.
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