4th Nov 2026 12:04
(Alliance News) - Stock prices in London were higher at midday on Wednesday, with banking stocks rallying, while investors digested a sweeping Democratic victory in the US midterm elections and economic data showing accelerating inflation in the eurozone.
The FTSE 100 index was up 110.52 points, 1.0%, at 10,748.95. The FTSE 250 was up 190.48 points, 0.8%, at 24,865.39, and the AIM all-share was up 6.53 points, 0.9%, at 761.13.
The Cboe UK 100 was up 0.9% at 1,066.49, the Cboe UK 250 was up 0.7% at 21,982.81, and the Cboe Small Companies was up 2.4% at 18,993.94.
In European equities on Wednesday, the CAC 40 in Paris and the DAX 40 in Frankfurt also traded higher.
Investors were assessing the outcome of the US midterm elections, which delivered a major setback for President Donald Trump as Democrats secured control of both chambers of Congress.
Democrats regained control of the House of Representatives and flipped eight Senate seats, including victories in the traditionally Republican states of Texas, Kansas, South Carolina, Ohio, Iowa and Maine, as well as North Carolina and Michigan.
In Michigan, Abdul El-Sayed won the Senate race, becoming the first Muslim senator in US history.
The results represent a significant blow to Republicans and threaten to constrain Trump's legislative agenda during the final two years of his second term.
Trump told The New York Times that he would accept the election results, while playing down the significance of the Republican defeats.
In an interview with Fox News, the president said he did not see the party's losses "as a hit on me."
Raphael Olszyna-Marzys, international economist at J Safra Sarasin Sustainable Asset Management, said: "The decisiveness of the outcome left Donald Trump no room to contest the results, which is clearly a good thing. It adds clarity to the outlook and also removes some of the risk premium that a disputed result would have placed on asset prices. The election also reveals how unpopular the war against Iran is. A renewed escalation would therefore come as a surprise, capping how far energy prices can rise."
However, he said the midterm result "should not be overread", as "Trump can veto any legislation".
He added: "For fixed income markets, the blue wave should be positive on the margin. This reflects somewhat weaker growth in AI capex (capital spending on artificial intelligence infrastructure), and hence eventually somewhat less inflationary pressure."
Meanwhile, growth in the UK services sector accelerated to an eight-month high in October, supported by stronger demand and higher employment, although rising cost pressures added to expectations of further Bank of England interest rate hikes.
According to survey data from S&P Global, the seasonally adjusted services purchasing managers' index rose to 52.8 points in October from 52.1 in September, marking the fourth consecutive month of expansion and the highest reading since February.
However, the final reading was below the flash estimate of 53.1 points and remained below the long-run average of 54.2 points. A reading above 50 points indicates expansion, while one below signals contraction.
S&P Global said the improvement reflected a sustained recovery in new orders, which increased for the fourth consecutive month and at the fastest pace since January.
Elsewhere, eurozone consumer price inflation accelerated to its highest level in more than three years in October, driven by a further surge in energy costs.
According to preliminary figures from Eurostat, consumer prices rose 4.0% year-on-year in October, accelerating from 3.8% in September and matching market consensus cited by FXStreet.
The reading marked the highest annual inflation rate since September 2023.
Energy prices jumped 21% from a year earlier, accelerating from a 19% increase in September, while services inflation edged up to 3.3% from 3.2%.
Excluding energy, food, alcohol and tobacco, core consumer price inflation remained unchanged at 2.5%, also in line with market expectations.
The pound was quoted at USD1.3480 at midday Wednesday, higher than USD1.3416 at the London equities close on Tuesday. Against the euro, sterling edged down to EUR1.1985 from EUR1.1986 a day earlier.
The euro rose to USD1.1248 from USD1.1197 late Tuesday. Against the yen, the dollar edged up to JPY158.46 from JPY158.44.
In the FTSE 100, Lion Finance Group was among the leading gainers, climbing 4.8% after reporting higher third-quarter profit and net interest income.
The banking group said pretax profit rose 22% to GEL790.9 million from GEL647.0 million a year earlier, while net interest income increased 19% to GEL941.7 million from GEL788.7 million.
Lion Finance also declared a third-quarter dividend of GEL3.25 per share, payable on December 18.
Other financial stocks were also higher, with Standard Chartered and HSBC Holdings both advancing 3.3%.
At the other end of the blue-chip index, Weir Group dropped 7.5% after reporting a sharp decline in original equipment sales during the third quarter, despite continued demand from mining customers.
The engineering group said original equipment revenue declined 26% organically year-on-year, while overall organic growth was 5.0%, including 4.0% growth in its Minerals division.
Weir said underlying demand remained "good" during the quarter, as customers continued to drive production, although it cautioned that geopolitical developments could create additional short-term headwinds.
Defence stocks were also under pressure, with BAE Systems falling 4.8% and Babcock International Group declining 3.1%.
In the FTSE 250, Metro Bank Holdings jumped 12% after reporting an increase in gross loans and advances to customers.
Meanwhile among small-caps, Smiths News fell 9.1% after reporting lower annual profit and revenue.
The newspaper and magazine distributor said pretax profit declined 15% to GBP32.1 million in its 2026 financial year from GBP37.9 million a year earlier.
Revenue fell 2.6% to GBP1.04 billion from GBP1.06 billion.
Despite the decline in earnings, Smiths News proposed a final dividend of 3.90 pence per share, bringing its total annual payout to 5.65p, up from 5.55p a year earlier.
Stocks in New York were called higher, with the Dow Jones Industrial Average set to open up 1.4%, while the S&P 500 and the technology-heavy Nasdaq Composite were both called up 1.0%.
The yield on the US 10-year Treasury was quoted at 4.93% at midday Wednesday, narrowing from 4.94% on Tuesday. The yield on the US 30-year Treasury was unchanged at 5.30%.
Brent oil traded at USD102.24 a barrel at midday Wednesday, down from USD103.24 late Tuesday, as investors continued to monitor developments in the Middle East.
Trump confirmed that the US had launched strikes on Iran, prompting warnings from Tehran that a renewed conflict would benefit neither side.
The strikes came as Americans prepared to vote in the midterm elections, amid speculation that Washington could resume a broader military campaign against Iran once polling had concluded.
Gold was quoted at USD4,041.88 an ounce at midday Wednesday, higher than USD3,933.38 on Tuesday.
Still to come on Wednesday's economic calendar, the US releases its ADP employment report, trade balance figures and composite purchasing managers' index.
By Eva Castanedo, Alliance News senior economics reporter
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