(Alliance News) - Stock prices in London opened mixed on Wednesday after the first US presidential debate between President Donald Trump and Democrat Joe Biden turned into a shouting match, while investors reacted positively to cost cutting by Royal Dutch Shell.
The large-cap FTSE 100 index was up just 0.84 of a point at 5,898.34. The mid-cap FTSE 250 index was flat at 17,170.68. The AIM All-Share index was down 0.1% at 956.17.
The Cboe UK 100 index was down 0.2% at 585.92. The Cboe 250 was down 0.2% at 14,520.42, but the Cboe Small Companies was flat at 9,138.85.
In mainland Europe, the CAC 40 in Paris was down 0.7%, while the DAX 30 in Frankfurt was 0.6% lower.
Biden told a raging Trump to "shut up" in an opening debate that turned almost immediately into a shouting match 35 days ahead of the most tense US election in recent memory.
The debate in Cleveland, Ohio, was as bad-tempered as had been feared, with Trump leading the way in yelling over his challenger and the Fox News moderator Chris Wallace alike.
In New York on Tuesday, Wall Street ended lower, with the Dow Jones Industrial Average down 0.5%, S&P 500 down 0.5% and Nasdaq Composite down 0.3%. US markets closed well before the presidential debate got underway at 9pm local time.
"European bourses are kicking off trading on the back foot after a disappointing US Presidential debate in which Trump unnerved investors over a possible delayed release of the November 3rd results, sparking a risk-off drive. The rather frenzied debate will have done little to boost Trump's position in the polls. The unruly debate has overshadowed a slew of upbeat data since," said City Index analyst Fiona Cincotta.
In the FTSE 100, Ferguson opened as the best performer, up 2.0% after RBC Capital raised the plumbing and heating products supplier to Sector Perform from Underperform.
The company formerly known as Wolseley on Tuesday had said it would resume dividend payments despite annual earnings being held back by the coronavirus outbreak.
Royal Dutch Shell 'A' and 'B' shares were up 1.6% and 1.2% respectively after the oil major said it will cut as many as 9,000 jobs as the company makes a structural shift into low-carbon energy.
Shell said it expects third-quarter production to be between 820,000 and 860,000 barrels of oil equivalent per day, while sales volumes are expected in a range between 4 million and 5 million barrels per day.
The Anglo-Dutch firm said it expects to make job reductions of 7,000 to 9,000 by the end of 2022 following the plunge in oil demand. The "reduced organisational complexity" along with other measures, Shell said, are expected to deliver sustainable annual cost savings of between USD2.0 to USD2.5 billion by 2022.
At the other end of the large caps, Compass Group was the worst performer, down 4.5% after the contract caterer said revenue for its financial year ending Wednesday is down 19%, having fallen 44% in the third quarter and 36% in the fourth.
Compass said it saw some improvement in the fourth quarter and students began to return to schools and workers to offices.
In the FTSE 250, 888 Holdings was the standout performer, up 21% after the gambling firm forecast annual profit to top prior expectations and declared a special dividend.
For the half year ended June 30, revenue increased 37% to USD379.1 million from USD277.3 million last year and pretax profit more than doubled to USD50.9 million from USD22.2 million.
888 declared a special payout of 2.8 US cents per share along with an interim dividend of 3.2 cents per share.
Looking ahead, 888 said annual adjusted earnings before interest, tax, depreciation and amortisation are expected to be "significantly ahead of prior expectations".
The pound was quoted at USD1.2835 early Wednesday, lower than USD1.2859 at the London equities close Tuesday.
The UK economy's second-quarter slump was not as bad as first estimated, according to the latest figures from the Office for National Statistics on Wednesday.
On an annual basis, UK gross domestic product fell by a revised 21.5% in the three months to June, having contracted 1.7% in the first quarter of 2020. The second-quarter reading was revised to a slightly smaller annual decline from the original estimate of 21.7%.
On a quarterly basis, UK GDP shrank by 19.8%, revised from the initial estimate of a 20.4% fall, having contracted 2.2% in the first three months of 2020. The quarterly figure was in line with the consensus estimate. The ONS said this was the largest quarterly contraction in the UK economy since quarterly records began in 1955.
The euro was priced at USD1.1733 early Wednesday, down from USD1.1741 at the European equities close Tuesday. Against the yen, the dollar was trading at JPY105.50, soft compared to JPY105.61.
Brent oil was quoted at USD41.21 Wednesday morning, up from USD41.08 a barrel at the London equities close on Tuesday. Gold was quoted at USD1,890.01 an ounce, down against USD1,892.11.
The Japanese Nikkei 225 index closed down 1.5%. In China, the Shanghai Composite ended down 0.2%, while the Hang Seng index in Hong Kong is up 1.1%.
Factory activity in China improved slightly in September, according to official data, showing a small rebound in the economy ahead of the week-long National Day public holiday.
The purchasing managers' index is a key gauge of manufacturing activity in the world's second-largest economy, which has largely bounced back after plunging in February because of tough coronavirus measures.
In September, the PMI figure increased slightly to 51.5 after slipping to 51.0 in the previous month. Any figure above the 50-point mark represents growth while below it signals a contraction.
The economic calendar for Wednesday has US ADP employment due at 1315 BST and GDP at 1330 BST.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
Copyright 2020 Alliance News Limited. All Rights Reserved.
