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(Alliance News) - Stock prices in Europe were in negative territory early Wednesday, despite renewed US stimulus hopes, with Covid-19 concerns and a firmer pound also holding back the FTSE 100.
Local politicians have warned of a "winter of hardship" in Greater Manchester as the area is forced into harsher coronavirus restrictions.
UK Prime Minister Boris Johnson imposed the stringent Tier 3 rules when negotiations between ministers and local leaders broke down after more than a week, but only confirmed a fraction of the funds Manchester politicians wanted from government.
Meanwhile, there were another 21,330 lab-confirmed cases of coronavirus in the UK, the government said on Tuesday, and a further 241 people died within 28 days of testing positive.
This was the highest daily death figure reported since June 5, but there is often a delay in the reporting of deaths over a weekend.
In London, the FTSE 100 index was down 31.40 points, or 0.5%, at 5,857.82 early Wednesday.
The mid-cap FTSE 250 index was down 58.73 points, or 0.3%, at 17,870.47. The AIM All-Share index was up 0.1% at 973.53.
The Cboe UK 100 index was down 0.8% at 581.60. The Cboe 250 lost 0.5% at 15,104.11, but the Cboe Small Companies was up 0.3% at 9,396.06.
In mainland Europe, the CAC 40 index in Paris was down 0.1% and the DAX 30 in Frankfurt down 0.3%.
In China, the Shanghai Composite fell 0.1% on Wednesday, though the Hang Seng was up 0.9% in late trade. Tokyo's Nikkei 225 closed 0.3% higher.
Gain Capital's Fiona Cincotta said Asian stocks moved higher after a "modestly firm handover from the US". Europe looked set to follow suit, before sentiment soured at the open.
"Any gains remain capped by concerns over rising Covid cases & tighter lockdown restrictions," Cincotta added.
"As the White House and Congress move closer towards a new Covid rescue package demand for riskier assets has picked up whilst the safe haven US dollar is coming under pressure. With Trump saying that he is prepared to accept a larger bill, talks will continue past House Speaker Nancy Pelosi's soft Tuesday deadline."
Against the yen, the dollar was trading at JPY105.13, down from JPY105.57 at the London equities close on Tuesday.
The euro stood at USD1.1854 early Wednesday, improved from USD1.1825 late Tuesday.
Cincotta continued: "UK inflation rebounded from August's disinflation; however, the rebound was less punchy than expected. Prices rose 0.4% month-on-month, less than the 0.5% increase forecast. Borrowing was also significantly higher than forecast. The pound, however, is unfazed, advancing versus both the euro and the weaker US dollar.
The pound was quoted at USD1.3007 on Wednesday morning, firm from USD1.2958 at the London equities close Tuesday.
Data from the Office for National Statistics showed public sector net borrowing was estimated at GBP36.1 billion in September, a sharp climb of GBP28.4 billion annually and the "third-highest borrowing in any month since records began in 1993".
The ONS added that borrowing for the first six months of the financial year, so between April and September, was estimated at GBP208.5 billion. This was up GBP174.5 billion annually and the highest period of borrowing between that six-month stretch since records began.
"Each of the six months from April to September 2020 were also records," ONS added.
Public debt rose to GBP2.060 trillion at the end of September, up GBP259.2 billion over the first six months of the financial year. Public debt is around 103.5% of gross domestic product, the highest debt to GDP ratio since 1960, ONS added.
The statistics agency commented: "The coronavirus pandemic has had an impact on public sector borrowing that is unprecedented in peacetime. Provisional estimates indicate that the GBP208.5 billion borrowed in the first half of the current financial year (April to September 2020) was nearly four times the GBP54.5 billion borrowed in the whole of the last full financial year."
UK consumer inflation quickened in September, ONS data on Wednesday showed, as the 'Eat Out to Help Out' scheme drew to a close.
Consumer prices rose 0.5% annually, in line with forecasts and accelerated from 0.2% in August.
"Transport costs, and restaurant and cafe prices, following the end of the Eat Out to Help Out scheme, made the largest upward contributions," the Office for National Statistics said.
On a monthly basis, consumer price rose 0.4%, though consensus according to FXStreet forecast a 0.5% uptick. In August, consumer prices fell 0.4% month-on-month. The UK government's Eat Out to Help Out scheme - which ran in August and discounted meals out up to a maximum of GBP10 per person - pushed down prices in restaurants and cafes in August.
On the London Stock Exchange, cybersecurity provider Avast slipped 0.2%, despite a promising third-quarter. It said adjusted revenue climbed 2.6% annually to USD226.0 million in the third quarter ended September 30.
Avast reaffirmed its annual outlook for adjusted revenue. It expects adjusted revenue at the "upper end of mid-single digit growth".
"As a result of the strong demand in the second quarter, revenue growth is expected to continue to outpace billings growth in the second half of the year," the company added.
Antofagasta climbed 0.2% early Wednesday. Copper production in the third quarter of 2020 came in 4.6% lower quarter-on-quarter at 169,600 tonnes, the miner said, "due to major maintenance work" at its Los Pelambres mine in Chile.
For the nine-month period, output was in line with forecasts at 541,300 tonnes, though down 7.3% annually.
"Copper production guidance for 2020 is unchanged at the lower end of the original 725-755,000 tonnes range," Antofagasta said, adding that government-imposed virus restrictions in Chile are easing.
Fresnillo on the other hand, said it has "marginally reduced our full-year guidance for gold" as working restrictions due to the virus at its Herradura mine in Mexico have hurt production.
Gold output fell 6.3% quarter-on-quarter to 172,718 ounces in the period to September. Total silver fell 2.3% to 13.3 million ounces. Elsewhere, lead output fell 6.4% and zinc dropped 1.5%.
Fresnillo now expects annual gold production in the range of 745,000 to 775,000 ounces. Its previous guidance range was between 785,000 and 815,000 ounces.
Fresnillo shares were down 2.8%, worst blue-chip performer.
Peer Polymetal International fell 1.1%.
Among the FTSE 250s, Centamin plunged 18%. Third-quarter gold output fell 2% quarter-on-quarter to 128,240 ounces, though surged 31% annually.
Sales dropped 9% quarter-on-quarter, but were up 9% yearly.
Centamin reaffirmed its guidance of gold output between 445,000 and 455,000 ounces in 2020 at an all-in sustaining cost of USD950 to USD1,050 per ounce. Centamin had reduced its forecast earlier in October.
Gold fetched USD1,918.71 an ounce on Wednesday morning, up from USD1,908.45 at the London equities close on Tuesday.
Brent oil was quoted at USD42.70 a barrel, up from USD42.48.
By Eric Cunha; ericcunha@alliancenews.com
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