Ferrexpo Share News (FXPO)

(Alliance News) - The FTSE 100 continued to lag at midday on Tuesday as optimism stemming from US President Donald Trump's release from hospital ebbed, with investors now awaiting remarks from central bankers.

The FTSE 100 index was down 8.04 points, or 0.1%, at 5,934.90 midday Tuesday. The mid-cap FTSE 250 index was up 100.87 points, or 0.6%, at 17,683.96. The AIM All-Share index was down 0.2% at 971.76.

The Cboe UK 100 index was down 0.2% at 590.28. The Cboe 250 was up 0.8% at 15,020.44 and the Cboe Small Companies up 0.8% at 9,444.48.

In mainland Europe, the CAC 40 in Paris was up 0.3% and the DAX 30 in Frankfurt was up 0.1% Tuesday afternoon.

"Monday's optimism on President Trump's improving health conditions as well as hopes of further stimulus from US lawmakers recently had an important bullish impact on both US and Asian stock markets, however, this sentiment isn't continuing in Europe today after benchmarks opened mixed," said Pierre Veyret, technical analyst at ActivTrades.

Wall Street is also set for a slip on Tuesday, with the Dow Jones pointed down 0.2%, the S&P 500 down 0.4% and the Nasdaq down 0.6%. On Monday, the the Dow Jones Industrial Average ended up 1.7%, the S&P 500 up 1.8% and Nasdaq Composite closed 2.3% higher.

US President Donald Trump on Monday returned to the White House after a three-day stay at a hospital where he was treated for the coronavirus, saying on Twitter he was "feeling really good."

"While many investors welcomed the good news from the US, they may also prefer to stay cautious prior to today's speeches from the chairs of both the ECB and the Fed, Christine Lagarde and Jerome Powell," said Veyret continued. "While nothing significant is really expected today from the central banks, investors will still scrutinize these speeches in order to get more clues on where monetary policies will be going soon."

European Central Bank President Christine Lagarde speaks at 1400 BST, while Fed Chair Powell is scheduled to speak at 1540 BST.

Already out from Tuesday's economic events calendar, the UK construction sector continued to expand in September.

The IHS Markit/CIPS construction total activity index registered 56.8 in September, up from 54.6 in August. Any reading over 50.0 indicates expansion, and one below contraction.

The strongest performing category was home building, while work on commercial projects also increased strongly. Meanwhile, civil engineering activity fell for the second month running and at the sharpest rate since May.

Sterling was quoted at USD1.2973 on Tuesday, marginally higher than USD1.2968 at the London equities close on Monday.

However, the eurozone's construction sector recorded its seventh consecutive month of decline in output.

The IHS Markit Eurozone Construction Total Activity Index was 47.5 in September, down slightly from 47.8 in August, and marks the seventh consecutive month below the no-change mark of 50.0.

Nationally, there were falls in construction activity across Germany and France, with growth sustained in Italy.

The euro traded at USD1.1780 on Tuesday, soft on USD1.1787 late Monday.

Against the yen, the dollar was changed hands at JPY105.58 versus JPY105.67.

Gold was quoted at USD1,912.15 an ounce on Tuesday, lower than USD1,914.70 on Monday. Brent oil was trading at USD41.60 a barrel, soft against USD41.66 late Monday.

In London, Rentokil Initial shares were down 3.3% after Goldman Sachs downgraded the pest control and hygiene firm to Neutral from Buy.

At the top of the FTSE 100 was Rolls-Royce Holdings, the stock continuing its rebound after shedding more than 25% last week.

Shares in the jet engine maker were up 9.1% at midday, having risen 8.6% on Monday.

On Monday, Rolls-Royce said it will meet with fixed income investors ahead of plans to launch a bond offering. Last week, the company outlined plans for a balance sheet boosting GBP2 billion rights issue, a GBP1 billion bond offering and the possibility of GBP2 billion more in loans.

Barclays shares rose 3.3% after Reburn boosted the lender to Buy from Sell.

Comfortably at the top of the FTSE 250 was Watches of Switzerland, shares clocking up a 21% rise after the luxury watch retailer raised its full-year guidance.

Revenue for the first 10 weeks of the second quarter ending October 25 was stronger than expected, rising 18% in reported terms to GBP202.7 million from the year before. This represented a 20% revenue rise at constant currency.

Strong domestic UK sales offset lower tourist and airport business, and regional stores were outperforming London stores where footfall was still weak. US momentum accelerated, with second quarter US sales to date at GBP57.7 million, up 35% reported and 43% at constant currency.

Outlook-wise, the company upgraded its financial 2021 revenue guidance to between GBP880.0 million and GBP910.0 million from previously guided range of GBP840.0 million to GBP860.0 million.

It also upgraded its forecast for earnings before interest, tax, depreciation, and amortisation margin, now expecting a 1.0% to 1.5% rise year-on-year. It had previously been expecting this to be flat.

Ferrexpo shares dipped 3.2% after the Swiss-headquartered iron ore company, with assets in Ukraine, reported a drop in third quarter production due to a planned pelletiser maintenance and said its appeal over Ferrexpo Poltava Mining had been dismissed.

Ferrexpo noted its June announcement that a district court in Kyiv had placed a restriction which covered 50.3% of shares in Ferrexpo Poltava Mining held by Ferrexpo AG Switzerland. Ferrexpo AG Switzerland is Ferrexpo Poltava Mining's sole shareholder. The Kyiv Court of Appeal has dismissed Ferrexpo's appeal against the court order, meaning the restriction remains in place.

Separately, Ferrexpo reported its production for the third quarter of 2020, which ended September 30, of 2.5 million tonnes, down from 2.9 million in the second quarter. This drop was attributed to "reduced volume due to planned pelletiser maintenance in early September."

Premier Oil shares rose 8.5% on plans for an all-share merger with Harbour Energy's UK operating company, Chrysaor Holdings.

It will merge with Chrysaor through a reverse takeover, retaining a London listing.

Premier Oil stakeholders are expected to own up to 23% of the combined group - comprising Premier shareholders owning up to 5.45% and existing creditors holding the balance - and Chrysaor shareholders owning at least 77%.

Combined, the business would have production as at June 30 of more than 250,000 barrels of oil equivalent per day and combined proved and probable reserves as at 2019 end of 727 million barrels of oil equivalent.

By Lucy Heming; lucyheming@alliancenews.com

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