(Alliance News) - Stock prices in Europe were modestly lower on Tuesday while the pound traded slightly softer against the dollar despite some robust UK labour market figures.
In London, JD Sports Fashion was at the top of the FTSE 100 on a sharp jump in interim revenue, while plant hire firm Ashtead slipped despite quarterly profit rising.
The FTSE 100 was 8.93 points lower, or 0.1%, at 7,226.88 Tuesday midday. The FTSE 250 was off just 9.32 points at 19,669.13, while the AIM All-Share was down 0.2% at 876.16.
The Cboe UK 100 index was flat at 12,255.93. The Cboe UK 250 was flat at 17,538.47, and the Cboe UK Small Companies was up 0.1% at 10,855.85.
In mainland Europe, the CAC 40 in Paris and the DAX 30 in Frankfurt were down 0.5% and down 0.1% respectively in early afternoon trade.
"Equities continue to struggle, although given the healthy rebound in European equities over the past two weeks the overall atmosphere is still firmly bullish," commented Chris Beauchamp, chief market analyst at IG.
He added: "The modest losses in indices seen so far today, and the slightly weaker US open predicted by futures, suggest a waning of the bullish momentum that has dominated since the last week of August, but the breakout from the August range is still intact, with the overall move higher looking like a continuation of the equity rally that has been, by and large, a feature of the year so far."
In addition, the mood was cautious as investors await the European Central Bank's meeting on Thursday, which should see the central bank announce a package of stimulus measures.
Turning to UK data, Beauchamp commented: "UK employment data was solid, if unspectacular, allowing the pound to recover some ground against the US dollar. Taken with yesterday's GDP data, the UK economy remains in a strong position, defying calls for a recession."
Official data showed the UK unemployment rate returned to a 45-year low and wage growth hit its highest level since 2008.
UK average weekly earnings in the period from May to July grew 4.0% on an annual basis including bonuses, the highest since 2008. The unemployment rate was 3.8% in the three months to July, lower than 4.0% recorded a year earlier and 3.9% recorded in the three months to June.
The pound was quoted at USD1.2336 Tuesday midday - having traded below USD1.2310 earlier in the session - soft compared to USD1.2369 late Monday.
Sterling trailed lower overnight after UK Prime Minister Boris Johnson suffered another humiliating Commons defeat, as his second bid for a snap general election was rejected by MPs.
Parliament has now been suspended for five weeks, reconvening in October and bringing to a close the longest parliamentary session in the history of the UK.
The PM insisted he would not ask for another Brexit delay, despite royal assent being given to legislation requiring an extension to the UK's EU membership unless a divorce deal is approved or Parliament agrees to leaving the EU without one by October 19. Following the defeat, Johnson said the government would "press on with negotiating a deal while preparing to leave without one" ahead of the European Council summit on October 17.
In the US on Tuesday, Wall Street is poised for a lower start, with the Dow Jones and S&P 500 both called down 0.2% and the Nasdaq Composite set to shed 0.3%.
In London, Ashtead Group slipped 2.3% despite the equipment rental firm posting a rise in profit for the first quarter. For the three months ended July 31, pretax profit was GBP304.7 million, up 11% from GBP274.4 million a year before.
Ashtead's rental revenue for the period came in at GBP1.16 billion, up 21% from GBP961.0 million year-on-year, as Sunbelt US rental only revenue grew 18% and Sunbelt Canada grew 26%, offsetting a 1% decline in rental only revenue from Ashtead's A-Plant business, due to the UK's flatter market.
"Ashtead's first-quarter sales and profit figures are in line with the forecasts for the full-year put out by the management team alongside June's full-year results, but the shares are down, to partly reflect their recent good run to within a whisker of late 2018's all-time highs but also niggling worries over the macroeconomic outlook," said Russ Mould, AJ Bell investment director.
At the top of the FTSE 100 was JD Sports International, up 5.7% after reporting a solid rise in interim profit.
Profit before tax in the six months to June 30 rose by 6.6% to GBP129.9 million from GBP121.9 million, though the company said on a proforma basis, using last year's accounting method, profit climbed by 13% to GBP137.5 million.
The FTSE 100-listed clothing retailer delivered a 47% year-on-year jump in revenue to GBP2.72 billion from GBP1.85 billion, largely driven by higher sales in its Sports Fashion unit.
In the FTSE 250, Galliford Try was up 5.6% while shares in Bovis Homes dipped into the red, down 4.1%, as the two companies resumed takes to merge housebuilding businesses.
In a joint statement, Bovis Homes and Galliford Try clarified that the talks solely related to a merger of Bovis with Galliford Try's housebuilding units and not with Galliford Try itself. Bovis said Galliford Try would be a "well-capitalised, standalone construction-focused group" owned entirely by Galliford Try shareholders.
Back in May, Galliford rejected a GBP1.05 billion bid by Bovis for Galliford's Linden Homes and Partnerships & Regeneration businesses.
Under potential transaction terms, Bovis would issue shares worth GBP675 million to Galliford Try shareholders, pay GBP300 million in cash, and takeover Galliford Try's 10-year debt private placement of GBP100 million.
Galliford shares initially spiked 27% on the news to 780.00p, but gave back much this gain throughout the morning in London.
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Galliford Try (GFRD)
Ashtead Group (AHT)
JD Sports (JD.)