(Alliance News) - Share prices in London were seen opening lower on Wednesday, as the prospect of a decisive US presidential result diminished, with the race too close to call.
Democrat Joe Biden claimed Wednesday he was winning America's knife-edge election, but President Donald Trump shot right back by predicting his own victory and accusing his opponent of trying to "steal" the vote.
"Europe is set to open to lower as caution dominates amid no clear outcome in the US elections so far. The elections are going down to the wire and that is unnerving investors," said Gain Capital analyst Fiona Cincotta.
The FTSE 100 was called 42.0 points lower at 5,744.77 points on Wednesday. The blue-chip index added 131.80 points, or 2.3%, on Tuesday, closing at 5,786.77 points.
The dollar was higher across the board.
The pound was quoted at USD1.2979 on Wednesday morning, down from USD1.3070 at the London equities close on Tuesday. The euro slipped to USD1.1638, from USD1.1729 late Tuesday. Versus the yen, the dollar fetched JPY105.00, up from JPY104.50 at the London market close on Tuesday.
"All of those expecting to see a blue wave sweep for the Democrats, have quickly seen this notion disabused as early results come in, with the Republican vote holding up fairly well, and in areas where you wouldn't normally expect," said CMC Markets UK chief market analyst Michael Hewson.
"The failure of the Democrats to capture the states of Texas and Florida, which they had high hopes of seizing control of, is likely to see the eventual outcome of this 2020 vote go to the wire, as the votes continue to get counted across the US. The Republicans appear to have also held onto Ohio."
Crucially for Trump, he is projected to edge Florida, which offers a bumper 29 electoral college votes and is one of the most coveted swing states. He is also projected to hold Texas, which offers 38 electoral college seats.
A candidate needs 270 electoral votes in the Electoral College system to win the White House. Biden was on 224 electoral votes and Trump on 213 with states still to be called.
In an address early Wednesday morning, Trump said "we did win this election", and he will go going to the Supreme Court to dispute the vote count.
Back in London, Irish paper and packaging firm Smurfit Kappa said its third-quarter performance topped expectations and mid-cap retailer Marks & Spencer Group swung to a loss in a lockdown hit first-half.
Smurfit Kappa said revenue for the nine months to September 30 came in at EUR6.31 billion, down 7.9% from the EUR6.85 billion it reported a year ago.
Earnings before interest, tax, depreciation and amortisation were 11% lower at EUR1.13 billion.
"Third-quarter performance was ahead of our expectations," Smurfit said.
Turning to M&S, revenue in the six months ended September 26 dropped 16% year-on-year to GBP4.09 billion, and the high street store chain swung to a pretax loss of GBP87.6 million from a GBP158.8 million profit.
However, the company said the 16% revenue drop outperformed its "Covid-19 planning scenario by 22.8%".
"The Food business has performed strongly despite substantial Covid headwinds during the six-month period achieving 2.7% LFL growth or 6.6% when excluding hospitality, which was largely closed during lockdown," M&S said.
Its more beleaguered Clothing & Home arm "was heavily impacted by the full Covid lockdown in the first quarter, ongoing social distancing and the priority to clear stock". Revenue there dropped 41%.
Elsewhere in London, Stobart Group posted a widened interim loss with the logistics, energy and aviation firm hit by a reduction in passenger travel at Southend Airport.
Revenue in the six months ended August dropped 29% to GBP53.2 million from GBP74.8 million, and its pretax loss ballooned to GBP77.4 million from GBP15.5 million.
"Covid-19 has created unprecedented challenges for the group," conceded Chief Executive Warwick Brady.
"Whilst passenger travel has been severely disrupted by lockdowns and evolving quarantine arrangements, London Southend Airport has benefited from uninterrupted income from its global logistics operation. At Stobart Energy, we are seeing a more consistent demand profile and have taken appropriate actions to ensure certainty of supply of waste wood for customers over the winter period to fulfil our valuable long-term supply contracts."
The company affirmed that it "remains focused on exiting Stobart Air", adding that the trading outlook at the unit "has deteriorated significantly" due to Covid-19.
"The group is seeking to exit that business in early course. To that end, it is engaging actively with parties interested in acquiring its stake and with Aer Lingus to enter a new commercial arrangement beyond December 2022 as part of this process," Stobart Group added.
In China, the Shanghai Composite index closed 0.2% higher and the Hang Seng index in Hong Kong was 0.3% lower in late trade. The Nikkei 225 in Japan ended the day 1.7% higher. Japan climbed after financial markets reopened following the Culture Day, but trade was more cautious elsewhere.
In the international economic calendar on Wednesday, there are a slew of services PMI readings due, with Germany, the eurozone, and the UK at 0855 GMT, 0900 GMT and 0930 GMT, respectively. In the afternoon, the US services PMI will be released at 1445 GMT.
A eurozone producer price index print is due at 1000 GMT, followed by the US ADP employment figures at 1315 GMT. This is an important precursor to the nonfarm payrolls data due Friday.
Already out, data showed China's services sector strengthened at the start of the fourth quarter.
Caixin's services purchasing managers' index rose to 56.8 in October from 54.8 in September. Any reading over 50.0 indicates expansion, and one below contraction.
It was the second-fastest rate of growth since August 2010, Caixin noted. Optimism over the year ahead ticked up in October to the strongest recorded since April 2012.
"The markets will remain fixed on the [election] results of each [US] state as they come in, however attention will also be turning towards the service sector PMI data. The service sector across the board has been more deeply impacted by the pandemic, with a more fragile recovery. In the UK that recovery has been showing signs of losing momentum as covid cases started rising again. The UK service sector PMI is expected to confirm October’s flash reading of 52.3," commented Gain Capital's Cincotta.
"The eurozone, which saw the second wave of covid start earlier particularly in tourist destinations such as France and Spain, is expected to report a deeper contraction in the sector that in September, with the PMI expected to fall to 46.2. The level 50 separates expansion from contraction."
England is set to go into a one-month lockdown from Thursday, but UK Prime Minister Boris Johnson must negotiate an MP vote on the matter in Westminster on Wednesday.
Gold was quoted at USD1,894.03 an ounce early on Wednesday, down from USD1,906.10 late Tuesday.
A barrel of Brent oil fetched USD40.10 early on Wednesday, up from USD39.64.
By Eric Cunha; ericcunha@alliancenews.com;
Copyright 2020 Alliance News Limited. All Rights Reserved.
Marks & Spencer (MKS)
Smurfit Kappa (SKG)