LONDON MARKET MIDDAY: Stocks down as attention back on Trump and China

Fri, 08th Nov 2024 12:12

(Alliance News) - Stock prices in London were lower midday on Friday after further stimulus from China "failed to move the needle", and yesterday's rate cuts are tempered by the possible implications of the second Trump US presidency.

China said on Friday lawmakers had agreed to raise the local government debt ceiling by USD840 billion, opening up new funds for its ailing economy.

However, "what has been announced so far doesn't seem to be moving the needle and the risks to China from a second Trump presidency are now overshadowing efforts to get the economy moving," said AJ Bell's Russ Mould. "The question on investors' lips will be whether this encourages Beijing to unveil a bolder package of measures."

He added: "As expected the Federal Reserve followed up the Bank of England's quarter percentage point rate cut with its own cut of the same quantum overnight. However, news which ordinarily would have drawn a lot of the market's focus has been pushed down the agenda as attention is turned to the implications of Donald Trump's return to the White House."

The FTSE 100 index was down 73.30 points, 0.9%, at 8,067.44. The FTSE 250 was down 141.78 points, 0.7%, at 20,493.59, and the AIM All-Share was down 2.82 points, 0.4%, at 735.41.

The Cboe UK 100 was down 1.0% at 808.97, the Cboe UK 250 was down 0.6% at 17,985.07 and the Cboe Small Companies was near-flat at 16,305.30.

Miners, who as Mould noted "are reliant on China for much of their demand", were in the red with Antofagasta losing 5.8%, Anglo American down 4.2% and Rio Tinto down 3.9%.

Vistry beat them all, however, with the housebuilder's stock plummeting 19%.

An increase in potential expenses (due to previously understated development costs) means a reduction in Vistry's guidance for adjusted pretax profit, which was cut by 19% to around GBP350 million for 2024 from GBP430 million previously. The company now expects to deliver total completions of around 17,500 units for the full year, reduced from previous guidance of 18,000.

Wizz Air was among the FTSE 250's biggest winners, rising 8.1%.

Bernstein, which rates the airline at 'outperform', cut the price target to 4,250p from 4,720p. Barclays, which rates it 'underweight', raised its target to 1,200p from 1,100p.

Serco was its biggest loser with an 11% decline.

The outsourcer was unsuccessful in renewing a contract over immigration detention facilities in Australia, although it maintains its full-year guidance and cited market consensus forecasting GBP4.9 billion in revenue and GBP282 million in underlying operating profit for 2025.

Over on AIM, Minoan was up 13%.

As part of its deal to convert creditors to shareholders, the Greece-focused hotel developer will issue 77.9 million shares at average 1.68p, "a significant premium".

Bushveld lost 21%.

The vanadium producer reported lower production and sales in its latest nine-month period, and said it has suspended guidance for the rest of this year due to working capital conditions.

In European equities on Friday, the CAC 40 in Paris was down 0.8%, while the DAX 40 in Frankfurt was down 0.7%.

The pound was quoted at USD1.2966 at midday on Friday in London, compared to USD1.2985 at the equities close on Thursday. The euro stood at USD1.0784, slightly down against USD1.0791. Against the yen, the dollar was trading lower at JPY152.36 compared to JPY153.11.

Stocks in New York were called mostly lower. The Dow Jones Industrial Average was called slightly higher, the S&P 500 index down 0.1%, and the Nasdaq Composite down 0.3%.

"Investors are digesting the implication of [Trump's] plans for tariffs and tax cuts and what they will mean for US companies but also for inflation and interest rates...Trump's win is likely to see investors scrambling to update their portfolios and it's very important in such a period of uncertainty that holdings are well diversified across a range of sectors," Hargreaves Lansdown's Ziad Gergi said.

Brent oil was quoted lower at USD74.72 a barrel at midday in London on Friday from USD74.91 late Thursday.

Gold was quoted lower at USD2,693.33 an ounce against USD2,697.24.

Still to come on Friday's economic calendar is the US Michigan consumer sentiment index.

By Emma Curzon, Alliance News reporter

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