(Alliance News) - London stocks were in the red at midday on Tuesday, with the FTSE 100 weighed down as BP turned to a quarterly loss and the pound firmed on the prospect of a December general election.
The FTSE 100 index was down 61.29 points, or 0.8%, at 7,269.99 Tuesday midday. The FTSE 250 was down 88.16 points, or 0.4%, at 20,122.00. The AIM All-Share was down 0.2% at 890.65.
The Cboe UK 100 index was flat at 12,437.60. The Cboe UK 250 was down 0.1% at 18,123.21 and the Cboe UK Small Companies was flat at 11,257.18.
In European equities, the CAC 40 index in Paris was down 0.1% and the DAX 30 in Frankfurt also 0.1% lower in early afternoon trade.
"A modest retreat from yesterday's highs is underway across equity markets, with the FTSE 100 suffering more thanks to weakness in heavyweight shares like BP and RBS. The overall tone still looks positive, and perhaps a bit too much so, ahead of the FOMC decision tomorrow," said Chris Beauchamp, chief market analyst at IG.
In London, BP was 4.1% lower after the oil major posted a third quarter loss.
BP posted a replacement cost loss for the third quarter of 2019 of USD351 million, after a USD1.78 billion profit in the second quarter and USD3.09 billion in the third quarter last year. On an underlying basis, BP's RC profit fell to USD2.25 billion, down 20% on a quarterly basis and 41% year-on-year.
The company was hit by "significantly" lower earnings in the Upstream division due to lower commodity prices, maintenance work, and the impact of poor weather in the Gulf of Mexico. Downstream, BP said, had a "strong" quarter operationally.
Peer Royal Shell Dutch reports its own third quarter figures on Thursday, with 'A' shares down 0.8% and 'B' shares down 0.9% following BP's update.
Meanwhile, Royal Bank of Scotland was 1.6% lower after UBS cut the lender to Neutral from Buy.
The FTSE 100, comprised of a large number of overseas earners, was also hampered as the pound firmed on the prospect of a UK general election.
The UK is on course for a December general election after Labour announced its conditions to back the move had been met.
Jeremy Corbyn told his shadow cabinet Labour would launch the "most ambitious and radical campaign for real change our country has ever seen" now a no-deal Brexit was "off the table".
UK Prime Minister Boris Johnson will attempt to convince the Commons to vote for a December 12 election at his fourth time of asking on Tuesday using a short Bill which sets aside the Fixed-Term Parliaments Act, requiring only a simple majority of MPs.
The pound was quoted at USD1.2869 at midday, firm versus USD1.2861 late Monday and having traded near the USD1.28 mark earlier on Tuesday morning.
"Elections are often seen as bringing heightened uncertainty and therefore negative in the near-term for affected markets, but in this case there is a hope that it will bring an end to the present quandary we find ourselves in," said David Cheetham at XTB.
"The pound will likely stay fairly well supported unless a no-deal outcome becomes more than marginally possible once more and there is also the hope that a softer version of Brexit than the latest WAB could receive greater support," said Cheetham.
In New York, stocks are pointed towards a lower start, with the Dow Jones seen down 0.2% and both the S&P 500 and Nasdaq called 0.1% lower.
To come in the US economic calendar are pending home sales at 1400 GMT and consumer confidence, which is due at the same time.
"US consumer confidence is likely to be key later today after seeing a sharp drop in September to 125.1 from the mid 130's. A modest increase to 128.2 in the October numbers would assuage concerns that the US consumer is getting nervous ahead of the upcoming Thanksgiving and Christmas period, while also not forgetting that US consumer confidence this year has seen its best levels since 2001," said Michael Hewson at CMC Markets.
On Wall Street, shares in Alphabet were 1.4% lower in pre-market trade after the Google parent after the market close on Monday reported a fall in third quarter profit.
For the three months ended September, pretax profit narrowed 14% to USD8.63 billion from USD10.08 billion the year prior. Basic earnings per share fell 23% to USD10.20 from USD13.21 the year prior.
This was despite revenue rising 20% to USD40.50 billion from USD33.74 billion the year before.
Back in London, Plus500 was at the top of the FTSE 250, up 5.6% after reporting "good revenue growth" in the third quarter of 2019.
For the three months ended September 30, the online contracts-for-difference trading service reported revenue of USD110.6 million, 10% higher than the USD100.1 million figure posted a year before and 18% higher than the second quarter revenue figure of USD94.1 million.
Earnings before interest, depreciation, taxation, and amortisation in the third quarter climbed an impressive 39% year-on-year to USD70.1 million and the Ebitda margin widened to 63% from 50% the year before and 57% in the second quarter.
Royal Mail slipped 3.7% after JPMorgan cut the postal operator to Underweight from Neutral.
By Lucy Heming; lucyheming@alliancenews.com
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