6th Nov 2018 16:56
LONDON (Alliance News) - The FTSE 100 ended firmly in negative territory on Tuesday amid cautious trade as investors await the outcome of midterm elections in the US.Wm Morrison Supermarkets ended as the worst performer among London's blue-chips, while Associated British Foods sat atop the FTSE 100 following its annual results.The FTSE 100 index closed down 0.9%, or 63.16 points, at 7,040.68. The FTSE 250 ended down 0.1%, or 20.06 points, at 19,043.65 and the AIM All-Share closed down 0.4%, or 4.04 points, at 987.70.The Cboe UK 100 ended down 1.0% at 11,949.36, the Cboe UK 250 closed down 0.2% at 17,257.76, and the Cboe Small Companies ended down 0.4% at 11,640.43."Global stocks are in wait and see mode today, with losses in Europe followed by a largely flat open in the US. Midterm elections in the US have done little to boost confidence, with support for Donald Trump's tax and trade policies coming into question should the Democrats disrupt the current Republican domination of Congress," said IG market analyst Joshua Mahony.Turning to the UK, Mahony said Brexit worries are continuing to dominate sentiment, with sterling volatile as traders monitor the withdrawal deal newsflow. The pound was quoted at USD1.3086 at the London equities close Tuesday, up compared to USD1.3022 at the close on Monday.Theresa May has told her Cabinet that she will not agree a withdrawal deal with the EU "at any cost", while EU negotiator Michel Barnier said a breakthrough on the Irish border issue was not close. At the regular weekly meeting in 10 Downing Street, senior ministers discussed proposals for a "review mechanism" to ensure that the UK is not stuck indefinitely in a possible backstop arrangement designed to avoid a hard border in Ireland.Following Tuesday's Cabinet meeting, May's spokesman said: "The prime minister said she was confident of reaching a deal. She said that, while the UK should aim to secure a withdrawal agreement as soon as possible, this would not be done at any cost.A gathering of EU leaders in Brussels on the previously mooted date of November 17 is now thought to have been ruled out, while a special summit later in the month would be dependent on Barnier declaring that "decisive progress" has been made in talks.However, the EU's negotiator told Belgian broadcaster RTBF that a deal does not appear to be close."There is still a real point of divergence on the way of guaranteeing peace in Ireland, that there are no borders in Ireland, while protecting the integrity of the single market," he said.The euro stood at USD1.1416 at the European equities close Tuesday, firm against USD1.1401 at the same time on Monday.In European equities on Tuesday, the CAC 40 in Paris ended down 0.5%, while the DAX 30 in Frankfurt ended 0.1% lower.In European data, IHS Markit showed eurozone private sector activity expanded at the weakest pace in over two years in October.The composite Purchasing Managers' Index fell to 53.1 from September's 54.1 which, while above the flash reading of 52.7, was the lowest since September 2016. A score above 50 suggests growth in the private sector.The services PMI eased to 53.7 from 54.7 in September, again above the flash reading of 53.3. The latest score reflected the slowest expansion since the start of 2017, IHS Markit said. Earlier survey data showed that euro area manufacturing grew at the slowest pace in nearly four years during October.Stocks in New York were higher at the London equities close, with the Dow Jones up 0.4%, the S&P 500 index up 0.3%, and the Nasdaq Composite up 0.3%.Focus in the US lies on the midterm elections, as voters head to the polls on Tuesday with all 435 seats in the House of Representatives up for re-election.A total of 35 US Senate seats out of the 100 total also are in play, as well as almost 40 out of 50 state governor positions and the balance of power in virtually every state chamber. Whatever the outcome, Trump on Monday made clear he knew his political future was on the line."In a sense, I am on the ticket," he told a raucous crowd in Cleveland. He warned supporters to get out and vote because "the press is very much considering it a referendum on me and us as a movement".Republicans are increasingly confident they will retain control of the Senate, but they face Democratic headwinds in the House. A Democrat majority in the House would make the next two years tougher for Trump to push through his legislative agenda.Ending as the biggest faller in the FTSE 100 on Tuesday was Wm Morrison Supermarkets, down 4.5% as it saw a slowdown in like-for-like sales in its third quarter.The supermarket chain's comparable sales, excluding fuel, rose 5.6% over 13 weeks to November 4, with retail rising 1.3% and wholesale 4.3%. Same-store sales, excluding fuel, were up 6.3% in the second quarter of the current financial year and were up 3.6% in the first quarter. Same-store sales had grown by 2.5% in the third quarter of financial 2018.Total sales for the recent third quarter were up 6.0%, excluding fuel, and up 6.4% including fuel.Miner Glencore closed down 3.0% after Katanga Mining, in which Glencore holds a majority stake, said the sale and export of cobalt from Kamoto in the Democratic Republic of the Congo has been suspended until further notice due to the detection of uranium above the "acceptable limit allowed" for export through main African ports to customers."The discovery of uranium in the cobalt hydroxide concentrate at Katanga will cause a delay in cash generation and build up in working capital at the mine (until the third quarter of 2019), but should be offset by the impact on the cobalt price to revenues coming from Mutanda and other cobalt production in Glencore globally," commented Tyler Broda, an analyst at RBC Capital Markets.Associated British Foods was the top gainer in the index, ending up 3.1% after its low-cost fashion chain Primark helped to offset the pricing troubles besetting its Sugar unit.For the financial year that ended September 15, AB Foods's pretax profit fell 18% to GBP1.28 billion from GBP1.58 billion a year ago, as the company incurred a GBP34 million loss on sale and closure of businesses compared to a GBP293 million profit on such items the year before.However, on an adjusted basis, pretax profit increased 5% to GBP1.37 billion. The company's revenue increased 1.4% to GBP15.57 billion from GBP15.36 billion a year ago. AB Foods's adjusted earnings per share came in at 134.9 pence, up 6% on the previous year and beating company-compiled analysts consensus which forecast an increase of 4.6% to 132.9p.Primark "delivered its most significant profit growth in recent years", with adjusted operating profit up 15% to GBP843 million from GBP735 million and revenue up 6.1% to GBP7.48 billion from GBP7.05 billion. AB Foods's Sugar unit, meanwhile, recorded a 51% drop in adjusted profit to GBP123 million from GBP249 million. DS Smith closed up 1.6% after saying it traded in line with expectations over the first half of its financial year.The firm expects adjusted operating profit and the return on sales for the six months to the end of October to be "materially ahead" of the year before. Adjusted operating profit in the prior year was GBP251 million, while return on sales stood at 9.0%.Workspace provider IWG was the biggest riser in the FTSE 250, climbing 8.2% as third-quarter revenue grew. For the three months to the end of September, the Regus office space provider reported revenue of GBP637.9 million, up 10% at constant currency from GBP585.7 million a year before.IWG said its performance for the period was broad-based, including good performances in the US, EMEA and Asia-Pacific regions, more than offsetting disappointing results in the UK. William Hill tumbled 5.9% after the bookmaker warned of a decline in annual profit.The betting firm reported revenue for the 17 weeks since June 27 was down 4% on a year before, and said it expects operating profit for its current financial year to come in between GBP225 million and GBP245 million. A year ago, adjusted operating profit was GBP291.3 million.Furthermore, William Hill said it expects its profit to reduce by GBP20 million in 2018 and by a further GBP25 million in 2019, due to "adverse regulatory and tax changes" including the increase in Remote Gaming Duty to 21% that was announced in the UK government budget last week. In commodities, Brent oil was quoted at USD71.43 a barrel at the London equities close Tuesday, down from USD73.45 late Monday.Gold was quoted at USD1,226.35 an ounce at the London equities close Tuesday, down from USD1,230.42 at the close on Monday.The UK corporate calendar on Wednesday has half year results from high street stalwart Marks & Spencer, airline Wizz Air and luxury fashion retailer Mulberry. There are third quarter results from broadcaster ITV and housebuilder Persimmon, and a trading statement from pub chain JD Wetherspoon.In Wednesday's economic calendar, German industrial production is at 0700 GMT while Halifax house prices in the UK are at 0830 GMT and Irish retail sales at 0900 GMT. Eurozone retail sales are then due at 1000 GMT.
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