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(Alliance News) -Â London stocks were on the back foot in opening dealings on Tuesday, with Wall Street's upbeat session overnight failing to flow through to Europe as investors turned cautious ahead of earnings reports from US banks JPMorgan and Citigroup.
The pound slipped after data showed the UK unemployment rate rose to 4.5% in the three months to August.
The FTSE 100 index was down 25.06 points, or 0.4%, at 5,976.32 early Tuesday. The mid-cap FTSE 250 index was down 102.39 points, or 0.6%, at 18,065.32. The AIM All-Share index was down 0.3% at 990.60.
The Cboe UK 100 index was down 0.6% at 593.59. The Cboe 250 was down 0.7% at 15,299.56, and the Cboe Small Companies down 0.3% at 9,529.45.
In mainland Europe, the CAC 40 in Paris was down 0.4% while the DAX 30 in Frankfurt was down 0.3% early Tuesday.
"Investors have become a little cautious as the US earnings season kicks in today. In addition to this, traders are also disheartened as J&J stopped the potential coronavirus vaccine trial due to an unknown illness," said Naeem Aslam at AvaTrade.
Johnson & Johnson said Monday it had temporarily halted its Covid-19 vaccine trial because one of its participants had become sick.
"We have temporarily paused further dosing in all our Covid-19 vaccine candidate clinical trials, including the Phase 3 ENSEMBLE trial, due to an unexplained illness in a study participant," the company said in a statement.
The pause means the enrolment system has been closed for the 60,000-patient clinical trial while the independent patient safety committee is convened.
J&J said that serious adverse events such as accidents or illnesses, are "an expected part of any clinical study, especially large studies". Company guidelines allow them to pause a study to determine if the SAE was related to the drug in question and whether to resume study.
Shares in Johnson & Johnson closed up 0.6% in New York on Monday, edging up 0.3% after-hours.
The Japanese Nikkei 225 index closed up 0.2% on Tuesday. In China, the Shanghai Composite ended flat, while the stock market in Hong Kong was closed because of a typhoon.
China's imports expanded by more than expected in September, reducing the nation's trade surplus, official data showed.
China's trade balance for September came in at positive CNY257.68 billion, about USD38.19 billion, versus CNY416.59 billion last month.
Exports spiked 8.7% on year before in September, the Customs Administration said. Imports, which collapsed in May but have since improved, jumped 12% – much stronger than the 1.3% contraction tipped by market analysts according to the FXStreet.
Against the yen, the dollar edged up to JPY105.44 versus JPY105.28.
Sterling was quoted at USD1.3030 after UK jobs data, lower than USD1.3070 at the London equities close on Monday.
The UK unemployment rate increased in August, figures showed Tuesday morning, with the Office for National Statistics noting that there are still nearly 700,000 fewer people in work compared to March.
The UK unemployment rate was 4.5% for the June to August period. Consensus, according to FXStreet, had seen the jobless rate holding steady at the revised 4.3% seen for the May to July period.
Growth in average total pay - which includes bonuses - for the three months was unchanged from a year ago, while regular pay - which strips out bonuses - grew 0.8%.
For the period, the ONS said estimates show 32.6 million people over the age of 16 in work, being 102,000 fewer than a year before and 153,000 below the previous quarter.
Early numbers for September suggest there is "little change" in the number of payroll employees in the UK, the ONS said. While this is up 20,000 compared with August, the number of employees has fallen by 673,000 since March.
Meanwhile, Germany suffered consumer price deflation in September, it was confirmed, with the country registering its worst reading since the start of 2015, indicating a weakened economy.
Figures from Destatis showed Germany's consumer price index in September fell 0.2% both on a monthly and annual basis. Tuesday's figures matched the earlier flash reading for September
Destatis noted that September's print marked the second time in 2020 that the annual inflation rate had dipped below zero, registering minus 0.1% in July, and the lowest reading since the minus 0.3% posted in January 2015.
The euro traded at USD1.1785 early Tuesday, down on USD1.1807 late Monday.
To come in the international economics calendar Tuesday, there is a US consumer price index reading at 1330 BST.
On the corporate side, third-quarter US banking earnings start on Tuesday, with JPMorgan and Citigroup reporting before the New York open. Meanwhile, Amazon.com's annual Prime Day sale kicked off on Tuesday, and Apple will unveil its iPhone 12 at a product launch event.
In London, SSE was at the top of the FTSE 100, up 2.8% after agreeing the sale of its 50% share in energy-from-waste ventures Multifuel Energy and Multifuel Energy 2 for just shy of GBP1 billion.
The sale is to European Diversified Infrastructure Fund III, an infrastructure fund managed by First Sentier Investors, for GBP995 million in cash.
MEL1 and MEL2 are joint ventures between SSE and Wheelabrator Technologies, consisting of the operational Ferrybridge Multifuel 1 and Ferrybridge Multifuel 2 facilities, as well as the Skelton Grange Multifuel development project, all in west Yorkshire. SSE said it in June identified its interests in MEL1 and MEL2 as an "early priority" for sale.
The deal is expected to complete by late 2020 subject to European antitrust approval.
"This sale marks a major step in our plans to secure at least GBP2 billion from disposals by autumn 2021, with just over GBP1.4 billion now delivered. While these multifuel assets have been successful ventures for SSE, they are non-core investments, and we are pleased to have agreed a sale that delivers significant value for shareholders while sharpening our strategic focus on our core low-carbon businesses," said Finance Director Gregor Alexander.
Wm Morrison rose 1.1%, J Sainsbury was up 0.9%, and Tesco added 0.6% after the latest UK grocery market figures from Kantar.
Take-home grocery sales growth ticked up to 11% in the four weeks to October 4, as UK shoppers "geared up for new lockdown restrictions", said Kantar.
Morrisons market share increased to 10.1% in the 12 weeks to October from 9.9% a year ago, with sales up 12%. Sainsbury's market share edged down to 14.9% from 15.3%, and sales rose 6.8%. Tesco's market share was flat at 26.9% with sales growth of 9.2%.
Leisure firms were lower after UK Prime Minister Boris Johnson announced the closure of pubs and bars across Merseyside as he battled to gain control over the coronavirus outbreak.
Johnson launched a three-tier system of local alert levels for England, with the Liverpool city region placed in the most serious "very high" risk category from Wednesday.
Chief medical officer Chris Whitty said that the flexibility within the new three-tier system of alert levels for England could see "additional" measures guided by local health leaders. Whitty also said people in areas of England not subject to local lockdown measures should not be lulled into a false sense of security.
New UK restrictions banning different households from mixing indoors could be imposed on London as early as this week to prevent rising coronavirus levels, Mayor Sadiq Khan has warned.
FTSE 100-listed Premier Inn and Beefeater owner Whitbread was down 1.6%, while cinema chain operator Cineworld fell 10% and pub firm Mitchells & Butlers 3.3%.
Gold was quoted at USD1,917.55 an ounce early Tuesday, lower than USD1,921.20 on Monday. Brent oil was trading at USD41.87 a barrel, higher than USD41.64 late Monday.
By Lucy Heming;Â lucyheming@alliancenews.com
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