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LONDON (Alliance News) - After a morning decline, UK stock indices have once again lost any momentum, flat-lining into the US open on the eighth day of the partial US government shutdown.
The FTSE 100 is down 0.7% at 6,391.10, the FTSE 250 is down 0.2% at 14,745.20 and the AIM All-Share is down 0.5% at 777.79.
In the last couple of hours, data showed German factory order books declined by 0.3%. Analysts had expected the data would show exports gaining 1.1% after they fell 0.8% in July, while factory order books had been expected to rebound from a slump in July to expand by 1% in August.
HSBC has also announced Tuesday that it will participate in the government's Help to Buy scheme, the second stage of which kicked off today. George Osborne quickly turned to twitter to spread the news, saying "Virgin and HSBC confirm today they're participating in #helptobuy - joining Aldermore, Bank of Scotland, Natwest, Halifax and RBS".
Some choppy movements in the forex markets so far but the euro and sterling are both generally range bound, still strong against the dollar as uncertainty over the cost of the shutdown continues to weigh on the green back. Currently, the pound trades at USD1.6105 and the euro at USD1.3575.
Gold is a little softer, currently USD1,316.50 per oz, while the price of a barrel of oil has risen slightly to USD110.20.
The European Parliament has agreed to move forward with stricter tobacco rules, setting the stage for negotiations with EU governments. The parliament recommended that 65% of tobacco products be covered with health warnings and also endorsed a proposed ban on menthol cigarettes, but with a five-year derogation. Lawmakers, however, rejected a ban on slim cigarettes and a bid to have e-cigarettes regulated as a medical product.
There has been no conclusive impact on the FTSE 350 tobacco sector so far, which holds on to gains of 0.3%, with British America Tobacco up 0.9% and Imperial Tobacco down 0.9%. Industrial metals are the biggest gainers, up 0.7% while retailers are the biggest losers, down 1.5%. M&S, down 2.9%, continue to lead retailers, and the FTSE 100, lower. Bernstein Research downgraded the high street chain to Under-perform after finding the companies key demographic of 50-70 year old women will be unlikely to buy as much of their new and more expensive clothing range.
US small business sentiment edged lower in September, data from the National Federation of Independent Business has shown. The NFIB small-business optimism index fell to 93.9 from a corrected 94.1 in August. The small change doesn't provide much direction for markets and ahead of the New York Bell, US futures are barely moving. After a sell off Monday there's a cautious mood on Wall Street and all major indices are set to open close to flat.
Still to come after the US open, the US redbook at 1355 BST will provide the latest retail sales data, and at 1500 BST another economic optimism reading, this time from the Investor's Business Daily (IBD) TechnoMetrica Institute of Policy and Politics (TIPP).
By Jon Darby; jondarby@alliancenews.com; @jondarby100
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