(Alliance News) - Stocks in London were lower at midday on Tuesday ahead of a highly anticipated US presidential election debate after the New York market close.
The large-cap FTSE 100 index was down 23.19 points, or 0.4%, at 5,904.74. The mid-cap FTSE 250 index was down 126.11 points, or 0.7%, at 17,244.06. The AIM All-Share index was flat at 955.11.
The Cboe UK 100 index was down 0.7% at 587.33. The Cboe 250 was down 0.8% at 14,620.42, and the Cboe Small Companies was flat at 9,150.05.
In mainland Europe, the CAC 40 in Paris was down 0.3% while the DAX 30 in Frankfurt was 0.6% lower at midday Tuesday.
US stock market futures were pointed to a flat open as US President Donald Trump squares off against Democratic challenger Joe Biden, in the first televised presidential election debate in Cleveland, Ohio, at 9pm local time.
Significantly behind in the polls, Trump has come out fighting, embarking on an endurance-testing schedule of rallies in key battlegrounds several times a week. For months Trump has painted Biden as senile. As the debate approached he increasingly focused on his claim that Biden takes performance-enhancing drugs.
Conversely, Biden's appearances so far have been relatively sparse, but holding a lead in many opinion polls, the challenger aims to focus on Trump's handling of the coronavirus crisis, the president's high-profile tax issues and racial unrest in the US sparked by the deaths of George Floyd and Breonna Taylor.
Biden has picked Kamala Harris as his running mate in the hope that the California senator offers the best chance of beating Trump and Mike Pence on November 3.
Analysts at BK Asset Management said: "Markets were cautious today with equities giving up much of their Asia session gains in morning European dealing in listless, quiet trade as participants steeled themselves for the first presidential debate. If the election is close and contested in every state, every county, every precinct the prospect of long drawn out litigation would cast doubt on any fiscal impulse until the presidency is decided and would surely weigh on stock into the end of the year. That's why today's debate could be a crucial moment in the election campaign because it could potentially send momentum towards Joe Biden or upend the expectations altogether.
"Biden has held a strong 8% lead for more than three months and the very latest revelation that Trump paid only USD750 in Federal taxes could further damage the president. But Biden can be error-prone while Trump instead of offering any explanation or apology for paying far fewer taxes than even those Americans near the poverty line will lean into his position arguing that he simply used the tax code to its full advantage."
On the London Stock Exchange, Ferguson was the best blue-chip performer, up 5.8% after the plumbing and heating products supplier resumed dividend payments and reported annual results that beat estimates.
For the financial year ended July 31, revenue slipped 0.9% to USD21.82 billion from USD22.01 billion in financial 2019; however, the figure was higher than the company-compiled consensus forecast of USD21.76 billion.
Pretax profit was down 4.8% to USD1.26 billion from USD1.32 billion, while trading profit, which excludes exceptional items and amortisation of acquired intangible assets, was USD1.67 billion, up 8.6% from USD1.54 billion. The trading profit figure beat the consensus forecast of USD1.59 billion.
Ferguson proposed a final dividend for the year of 208.2 cents which it said "effectively reinstates" the previously withdrawn interim dividend, and was in line with last year's payout.
"Indeed, the most striking proof that the financial measures taken have been successful, as well as signposting confidence in future prospects, is the full restoration of the dividend. The full-year payment is maintained from the previous year, which effectively reverses the previous decision to suspend the interim dividend. This returns the yield to its previous level of around 3% which, although somewhat pedestrian, nonetheless places Ferguson in a minority of stocks which have been able to weather the dividend storm," commented Interactive Investor's Richard Hunter.
B&M European Value Retail was up 5.0% after the discount retailer said it performed well in the first half of its financial year, as its knock-down prices and spacious stores were a hit among customers during the pandemic.
B&M European Value Retail said it has seen strong momentum for the period March 29 to September 26, with its easily accessible out-of-town locations continuing to prove attractive to customers during the pandemic.
B&M reported revenue growth in the first half of 25%, with B&M UK stores generating revenue growth of 30% including like-for-like growth of 23%.
The retailer - which joined the FTSE 100 index of London blue-chips on Monday last week - expects to open new stores in this financial year as a result of a pick-up in leasing activity, in a range of 40 to 45 B&M UK gross openings, most of which scheduled to open in the fourth quarter.
Standard Life Aberdeen was up 3.5% after JPMorgan upgraded the asset manager to Overweight from Neutral.
At the other end of the large caps, Next was down 2.5% after Berenberg downgraded the clothing and homeware retailer to Sell from Hold.
In the FTSE 250, Greggs was down 4.3% after the bakery chain flagged an uncertain outlook.
Greggs said September company-managed shop like-for-like sales improved to 76% of the same time in 2019 in the four weeks to September 26, with higher levels of activity following a slower August.
The Newcastle-based firm said that due to its seating option being closed, it was not in a position to participate in the UK government's 'Eat Out to Help Out' scheme and this, along with high temperatures made August a "difficult month" for baked goods.
"The outlook for trading remains uncertain, with rising Covid-19 infection rates leading to increasing risks of supply chain interruption and further restrictions on customer activities out of the home. In these challenging conditions our teams continue to work hard and have proven our ability to operate with social distancing and adapt to new digital channels," the company said.
eToro analyst Adam Vettese said: "The problem for food-on-the-go outlets like Greggs is that they have positioned themselves to attract passersby in city centres and the lunchtime workers crowd. With the government now urging workers to work from home for the next six months, we can safely assume that won't happen until at least the second or third quarter of next year."
The pound was priced at USD1.2855 at midday on Tuesday, unchanged from late Monday.
The ninth round of trade talks between London and Brussels is set to get underway as the two sides continue to clash over the controversial UK Internal Market Bill.
At talks in Brussels on Monday, European Commission Vice President Maros Sefcovic reiterated calls for British ministers to scrap provisions in the legislation which could see the UK unilaterally tear up elements of the Brexit divorce deal.
At a news conference following the meeting of the joint committee on the implementation of the agreement, Sefcovic said the EU "will not be shy" in taking legal action if the UK does not withdraw measures from the draft Bill by the end of the month.
However, cabinet office minister Michael Gove, who co-chairs the committee with Sefcovic, said the UK government intended to continue with passage of the bill, which is due to go through its report stage in the Commons on Tuesday.
"With renewed optimism about Brexit talks yesterday, sterling was the market's best-performing currency. This was despite reports that the UK and EU will continue to talk and negotiate despite both sides not ceding any ground on the UK's controversial Internal Market Bill. The EU has stated the UK has until the end of the month to remove the controversial elements on state aid and export licences in Northern Ireland before they face legal action," said analysts at OFX.
The euro was priced at USD1.1691, up from USD1.1653 late Monday in London. Against the yen, the dollar was quoted at JPY105.60, flat from JPY105.58.
Brent oil was trading at USD42.07 a barrel Tuesday midday, flat from USD42.10 a barrel at the London equities close Monday. Gold was quoted at USD1,881.50 an ounce, up from USD1,871.99 late Monday.
In the economic calendar for Tuesday, German inflation is due at 1300 BST and US consumer confidence at 1500 BST.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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