25th Sep 2013 10:20
LONDON (Alliance News) - London's main equity indices are relatively flat mid-morning as US and UK politics create a focus for markets Wednesday amid a lack of major corporate news and mixed European economic figures.
Having opened slightly lower on the back of Tuesday's losses in the US, UK stock indices are trading in a tight range Wednesday. Underlying concerns continue to grow as investors fear that the US government will run out of money if the White House and Congress fail to agree on spending for 2014, raising the debt ceiling by the end of September.
Traders are cautious as previous stand-offs over both the budget and the debt ceiling have played havoc on markets and introduced added uncertainty into the US economy.
In the UK, Labour leader Ed Miliband faced the wrath of energy companies as he announced Tuesday that he would freeze prices for 20 months if he wins the 2015 elections. Despite a backlash from the energy companies, Miliband on Wednesday maintained his stance, announcing that he would "take action" against any company that raised prices.
European data released this morning has been mixed.
Italian consumer confidence data climbed to 101.1 for this month from 98.3 in August, ahead of an expected rise to 98.5, according to FXstreet.com.
Similarly, strong German consumer confidence has been released early Wednesday. According to market research group GfK, the forward-looking consumer confidence index for October scored 7.1, up from September's revised reading of 7.0.
Conversely, French business confidence slipped to 97 from 98 in August, missing consensus forecasts cited by FXstreet.com of 99.
By mid-morning Wednesday, the FTSE 100 is off slightly at 6,556.80, the FTSE 250 is flat at 15,029.57, whilst the AIM All-Share index edges up 0.1% at 788.96.
At an individual stock level, Fresnillo, up 1.5%, and Anglo American, up 0.8% are benefiting from the increase and subsequent stabilisation of the price of gold since Tuesdays lows of USD1,306.13. The gold mining companies were two of the leaders on the blue-chip index. The yellow metal is now trading at USD1,322.92 per ounce.
Carnival, down 7%, is the biggest faller on the FTSE 100. The cruise operator Tuesday reported third-quarter profits were down 30%, but this was in line with expectations. The company, however, predicted weak earnings for the fourth quarter. Subsequently, Morgan Stanley has cut Carnival to Underweight from Equal-weight, and Numis has downgraded the company to Hold from Add.
Still to come in Wednesday's data calendar is UK CBI distributive trades survey data at 1100 BST. This is to be followed by a sequence of US figures later in the day. US MBA mortgage applications are due at 1200 BST, with US durable goods orders at 1330 BST. US new homes sales will be announced at 1500 BST, before EIA crude oil stocks information is at 1530 BST.
By James Kemp; [email protected]
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