(Alliance News) - Share prices in London were lower at midday on Friday as investors continue to fret over slowing economic growth and tapering of stimulus by the Federal Reserve, against a backdrop of political uncertainty in the US.
The FTSE 100 index was down 76.46 points, or 1.0%, at 7,010.24. The mid-cap FTSE 250 index was down 178.22 points, or 0.8%, at 22,853.07. The AIM All-Share index was down 9.25 points, or 0.7%, at 1,234.57.
The Cboe UK 100 index was down 1.3% at 696.40. The Cboe 250 was down 1.0% at 20,697.30. The Cboe Small Companies was 0.6% lower at 15,562.80.
In mainland Europe, the CAC 40 stock index in Paris was down 0.8%, and the DAX 40 index in Frankfurt was down 0.7%.
Analysts at ActivTrades explained: "Stocks continued to drift lower in Europe, alongside US futures, as 'fear trading' dominates for the first session of the quarter. Investors continue to flee both bond and stock markets, amid decreased risk appetite caused by lingering global concerns, which led those asset classes to their biggest correction this year. Investors are digesting the prospect of a much less supportive environment (tapering) while expectations of slower growth caused by poor economic data are piling up in many areas.
"In addition, lingering concerns regarding energy supply and, more generally, rising prices and inflation also contributed to denting this week's market sentiment. Finally, the political uncertainty in the US, where President Biden's spending plans are expected to be both decreased and postponed is further dampening trading enthusiasm."
In the FTSE 100, National Grid was among a handful of stocks in the green, up 1.7%. The power lines operator said a 450-mile subsea power cable linking the UK and Norway has started commercial operations, allowing the two countries to share renewable energy.
Water flowing from mountains to fjords and harnessed by hydropower stations in Norway will power British homes, as the world's longest interconnector hooks up the two countries' grids.
The cable also will allow excess wind power from Britain, when turbines are producing high levels of electricity in windy conditions but demand is low, to be exported to Norway to power homes there.
National Grid said it would help avoid 23 million tonnes of carbon emissions by 2030.When it is at full capacity, it will provide enough clean electricity to power 1.4 million homes, the company added.
In the FTSE 250, Euromoney Institutional Investor was the best performer, up 3.5%. The events and financial information company said it performed better than forecast in its most recently ended financial year.
Euromoney said it expects adjusted pretax profit for the full year ending September 30 to be significantly ahead of analysts' expectations. This reflects continuing strong growth in subscriptions in Pricing, Data & Market Intelligence, especially People Intelligence, and a continuing turnaround in Asset Management publishing.
The company said it continued to build momentum in its most recent financial year, underpinned by the strength of its subscriptions performance, as the timing of the recovery in physical events remains uncertain.
At the other end of the midcaps, AO World was the worst performer, down 21%, after the electrical goods retailer - a winner from the virus pandemic - warned online appliance sales growth now is slowing in the UK and Germany.
Adjusted earnings before interest, tax, depreciation and amortisation in the 2022 financial year, which ends March 31, are expected to be between GBP35 million and GBP50 million, AO said in a trading update. That's down from GBP64 million in financial 2021.
In the first half, revenue was up 5%. The UK saw 6% growth and Germany saw revenue in euros grew 3%, "despite the competitive online market". AO expects a similar rate of growth in the second half. The challenging market in both countries "resulted in lower volumes than expected which affected operational leverage, particularly in the second quarter," the Bolton, England-based company said.
Rival electrical appliance retailer Currys, which operates both online and on the high street, was down 9.0% in a negative read-across.
Greencore was down 3.2% after the sandwich maker reported a further improvement in revenue and profitability from pandemic levels, but warned of supply chain and labour challenges persisting across the UK food industry.
For the full year, Greencore expects to report revenue of GBP1.32 billion. It posted revenue of GBP1.26 billion in financial 2020.
In addition, Greencore expects to generate adjusted operating profit towards the upper end of previous guidance of between GBP36 million and GBP40 million for financial 2021.
Despite the positive trading result, the company cautioned that supply chain and recruitment challenges continued and that it was working to mitigate the impact and "engaging intensively with customers to recover input cost and other inflation".
Darktrace was down 3.1% at 794.50 pence after a group of shareholders sold GBP187.5 million in shares, a 3.6% stake, the investment bank running sale said.
The 25 million shares in the cybersecurity firm were placed at 750 pence each with institutional investors, according to joint global coordinator and bookrunner Jefferies. Darktrace will receive no proceeds, as the sale was of existing shares.
JD Wetherspoon was down 0.5%. The pub chain reported a drop in annual earnings as it continued to hit out at the UK government's decision to impose lockdown restrictions and the detrimental effects this has had on the industry.
For the financial year that ended July 25, the Watford-based pub and hotel operator reported revenue down 39% to GBP772.6 million from GBP1.26 billion the year ago. Like-for-like sales fell 38%, bar sales decreased by 42% and food sales by 37%.
Pretax loss before exceptional items widened to GPB167.2 million from GBP44.7 million, while pretax loss post exceptional items was GBP194.6 million compared to GBP105.4 million in financial 2020.
"Pubs have been at the forefront of business closures during the pandemic, at great cost to the industry - but at even greater cost to the Treasury. In spite of these obstacles, Wetherspoons is cautiously optimistic about the outcome for the financial year, on the basis that there is no further resort to lockdowns or onerous restrictions," said Chair Tim Martin.
The pound was quoted at USD1.3512 at midday on Friday, rising from USD1.3495 at the London equities close Thursday.
UK manufacturing sector activity slowed in September due to supply chain delays, slower new order growth, and rising material and labour shortages, IHS Markit said.
The Markit-CIPS UK manufacturing purchasing managers' index reading was 57.1 points in September, higher than the flash estimate of 56.3, but down from 60.3 registered in August.
Markit highlighted that manufacturing production increased for the sixteenth consecutive month in September. However, the rate of expansion eased for the fourth month in a row and to its weakest since February.
The euro was priced at USD1.1584, unchanged from late Thursday. Against the yen, the dollar was trading at JPY111.05, down from JPY111.50.
On the continent, the eurozone's inflation rate saw an uptick in September, coming in hotter than expected, according to flash estimates.
According to Eurostat, the single currency bloc's annual inflation fate accelerated to 3.4% in September, from 3.0% in August. The flash reading came in above forecasts of 3.3%, according to consensus cited by FXStreet.
On a monthly basis, consumer prices rose 0.5% in the eurozone in September. In August, they had risen 0.4%.
Elsewhere, the eurozone manufacturing economy stayed in expansion territory in September, figures showed, though a host of the single currency bloc's constituents suffered from supply chain strife and input cost inflation.
The IHS Markit eurozone manufacturing purchasing managers' index stayed above the 50.0 threshold in September, suggesting growth continued. However, September's tally fell to 58.6, down from August's 61.4 points. September's number also was below the flash estimate of 58.7 points.
Brent oil was quoted at USD77.85 a barrel Friday at midday, down sharply from USD78.50 late Thursday. Gold stood at USD1,755.82 an ounce, lower against USD1,760.78.
New York was pointed lower as a quick-fix funding deal in Washington was doing nothing to cheers investors concerned about rising inflation and slowing economic growth.
The Dow Jones Industrial Average was called down 0.4% based on futures trading, the S&P 500 down 0.5%, and the Nasdaq Composite down 0.4%.
US Congress approved a stopgap funding bill in a rare show of cross-party unity to avert a crippling government shutdown, as Democratic leaders struggle to overcome fierce infighting over President Joe Biden's domestic agenda.
Hours ahead of the midnight deadline, the House of Representatives voted to keep the lights on for another two months with a resolution that had already advanced comfortably from the Senate, with opposition Republicans supporting the ruling Democrats in both chambers.
"This is a good outcome, one I'm happy we are getting done," Chuck Schumer, the top Democratic senator, told colleagues on the chamber floor ahead of both votes, which were never in serious doubt.
The move came as Democratic US House Speaker Nancy Pelosi withdrew a promised vote on a USD1.2 trillion infrastructure bill late Thursday after failing to win enough support from her own lawmakers, in a stark illustration of the deep internal divisions threatening Biden's agenda.
Shares in construction-related firms Caterpillar, Deere & Co and Nucor Corp were down 0.5%, 0.2% an 0.5% respectively in the New York pre-market.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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