12th Nov 2024 12:05
(Alliance News) - Stock prices in London were lower at midday on Tuesday as investors digest pessimistic data out of Europe, thanks to headwinds threatened by Donald Trump's US election victory.
Annual consumer price inflation in Germany quickened to 2.0% last month. However Germany's outlook has weakened in the eyes of financial experts, survey results from the ZEW institute showed, with the economic expectations index down to positive 7.4 in November. Market consensus had anticipated a positive 12.8 point reading.
"In Germany, sentiment did not profit from the prospects of new national elections with the effect of US elections likely dominating as current situation and expectations worsened," Alexander Valentin of Oxford Economics said. "Headwinds for the eurozone have intensified lately, with economic growth remaining lacklustre and the outcome of the US elections adding to geopolitical uncertainty.
"However, potential US tariffs on eurozone products are still subject to political debate and are unlikely to impact industry in the near term."
The FTSE 100 index was down 82.86 points, 1.0%, at 8,042.33. The FTSE 250 was down 162.93 points, 0.8%, at 20,560.60, and the AIM All-Share was down 3.28 points, 0.4%, at 734.65.
The Cboe UK 100 was down 1.0% at 807.48, the Cboe UK 250 was down 0.9% at 17,992.36, and the Cboe Small Companies was down 1.8% at 10,581.16.
ConvaTec and DCC continued to lead the FTSE 100, surging by 20% and 15% respectively.
At the other end, Vodafone lost 5.9%.
The telecommunications titan declared an interim dividend of 2.25 euro cents per share, down 50% on-year, and said it expects a slowdown in its German market.
However, for the first half it said revenue grew 1.7% to EUR18.28 billion while pretax profit more than doubled to EUR2.11 billion.
"Vodafone may be writing off the current financial year as one of transition but it’s a message shareholders have received a lot in recent years and patience is wearing thin," AJ Bell's Russ Mould warned.
interactive investor's Richard Hunter likewise said: "There is little to catch the eye of the bulls in this release, with the end game still some way off, and the share price has reacted accordingly."
Drax led the FTSE 250, rising 7.5%.
The Yorkshire based electricity generator reported strong showings in its Flexible Generation, Pellet Production, and Biomass Generation operations, making progress towards its targets for 2027.
Reflecting the strong performance, Drax now expects 2024 full year adjusted Ebitda to be around the top end of analysts' consensus estimates.
Bank of Georgia came in second, rising 5.4%.
The Tbilisi-based lender said pretax profit jumped 44% to GEL606.5 million, around GBP174.9 million, in the third quarter. Net interest income rose 53% to GEL641.0 million.
Bank of Georgia anticipates to benefit from an expected real GDP growth of Georgia of around 9% for 2024 and 6% for 2025.
Star Energy was near the top of AIM, with its stock up 20%.
The onshore energy company has exchanged contracts to sell currently unused land at Alton, Hampshire to Pickerings Hire Ltd for GBP6.3 million in cash.
Completion depends on the satisfaction of planning conditions and surrendering the site's environmental permit, which Star expects to occur in the first half of 2025.
Also in the UK, traders continue to digest news that the ILO unemployment rate rose to 4.3% in the three months to September, surpassing market consensus, while wage growth slowed to 4.8%.
Also on Tuesday, the ONS reported that early estimates for October show the number of payrolled employees rising 0.3% on-year, while median monthly pay increased 7.0%.
"This latest set of jobs data puts in black and white what businesses and workers have been feeling," AJ Bell's Danni Hewson commented. "The labour market has been steadily tightening with vacancy numbers falling, redundancies rising and that headline unemployment figure creeping up again.
"The labour market has been steadily tightening with vacancy numbers falling, redundancies rising and that headline unemployment figure creeping up again."
She added: "Expectation that the [Bank of England] might deliver a Christmas rate cut has receded and markets are only pricing in a 70% chance of a February cut with the most hawkish 10% thinking that even next May is too early."
In European equities on Tuesday, the CAC 40 in Paris was down 1.3%, while the DAX 40 in Frankfurt was down 0.9%.
The pound was quoted at USD1.2821 at midday on Tuesday in London, lower compared to USD1.2875 at the equities close on Monday. The euro stood at USD1.0618, down against USD1.0654. Against the yen, the dollar was trading higher at JPY154.11 compared to JPY153.81.
Stocks in New York were called lower. The Dow Jones Industrial Average was called down 0.1%, the S&P 500 index down 0.1%, and the Nasdaq Composite down 0.1%.
Brent oil was quoted at USD72.21 a barrel at midday in London, rising on Tuesday from USD71.76 late Monday.
Gold continues to fall, being quoted at USD2,594.70 an ounce against USD2,617.20.
Still to come on Tuesday's economic calendar is the US consumer sentiment release.
By Emma Curzon, Alliance News reporter
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