London close: Stocks finish higher as investors watch bumpy presidential race

Stocks finished in the green on Tuesday after a turbulent afternoon, with the widening poll lead of US presidential hopeful Joe Biden being pointed to by commentators as a positive catalyst, in reducing the market uncertainty that a close result might bring with it.

The FTSE 100 ended the session up 0.12% at 5,949.94, and the FTSE 250 was 1.22% firmer at 17,797.44.

Sterling was weaker against its major trading pairs, last falling 0.18% on the dollar to $1.2955, and retreating 0.21% from the euro, to €1.0991.

“Stock markets have been dominated by indecision this week, with the US indices following their European counterparts in what looks like a distinct end to the ‘Trump left hospital’ bounce,” said IG senior market analyst Joshua Mahony.

“The coming months bring huge uncertainty for both sides of the Atlantic, with Trump’s ongoing recovery from Covid bringing yet another unknown amid Brexit, [the] US election, and second wave fears.”

Mahony said that, from a recovery perspective, markets had seen “slight grounds” for optimism after the International Monetary Fund laid the ground for a likely growth forecast upgrade next week.

“Meanwhile, a sharp rise in energy prices helped highlight easing fears of a second bout of Covid lockdowns.

“With Trump assuring people that they should not let Covid fears dominate, there is a feeling he will continue to push back on any suggestions to tighten restrictions once again.”

Some market watchers weren’t so sure about the Biden bounce, either, with Oanda senior analyst Craig Erlam saying Monday’s trading highlighted the “desperation” in the market to find something positive to cling onto - anything that would justify buying in such uncertain times.

“I'm hopeful that a vaccine will become available late this year to those most in need and be widely available by the spring and this is probably much of the reason why the 'fear of missing out' trade is holding firm.

“But it doesn't change the fact that we're less than a month away from a once in a lifetime election, one that even in the best case scenario will be drawn out.

“Worst case scenario would be far, far worse.”

Real Clear Politics's nationwide average of polls showed that Donald Trump was losing ground even in top battleground states.

In Covid news, the latest available figures showed that the number of new coronavirus cases in a majority of US states was now rising more quickly than a month ago, with the result that some economists were now watching for signs of longer-term scarring on the US economy.

On home shores, IHS Markit's construction sector purchasing managers' index climbed from a reading of 54.6 for August to 56.8 in September.

In equity markets, Victrex was down 1.25% even after it guided towards slightly better than expected sales for the financial year ended 30 September, and told shareholders to expect its dividend to be reinstated.

The high-performance polymer manufacturer's management still said that, at the end of the financial year, trading remained "subdued".

BHP lost 1.42% in London, after it signed an agreement with Hess Corporation to acquire an additional 28% working interest in the six-lease Gulf of Mexico development Shenzi.

The FTSE 100 group said it had agreed to a purchase price of $505m.

Following the acquisition it would be left with a working interest of 72%, adding around 11,000 barrels of oil equivalent per day of production.

On the upside, Watches of Switzerland surged 25.94% after it lifted its full-year guidance, driven by better-than-expected second quarter US and UK revenues, which offset lower tourist and airport sales.

Revenue for the year to 30 April was now expected to be between £880m and £910m, up from previous guidance of £840m to £860m.

Oxford Biomedica was ahead 0.71%, after it received government approval for a fourth manufacturing suite within its Oxbox facility , to be used to develop a potential Covid-19 vaccine.

Approval was given by the UK Medicines & Healthcare products Regulatory Agency (MHRA), the company said earlier in the session.

Wagamama owner Restaurant Group grew 4.49%, even after reporting a wider half-year pre-tax loss of £234.7m, as it pulled its financial guidance and warned of the impact of further coronavirus lockdowns in the UK.

In the same period a year earlier, the firm had already reported £87.7m of red ink.

Market Movers

FTSE 100 (UKX) 5,949.94 0.12%
FTSE 250 (MCX) 17,797.44 1.22%
techMARK (TASX) 3,826.50 0.56%

FTSE 100 - Risers

Rolls-Royce Holdings (RR.) 150.00p 21.56%
International Consolidated Airlines Group SA (CDI) (IAG) 97.74p 6.77%
Whitbread (WTB) 2,312.00p 5.62%
InterContinental Hotels Group (IHG) 4,307.00p 5.62%
Barclays (BARC) 104.18p 4.76%
British Land Company (BLND) 369.00p 4.68%
NATWEST GROUP PLC ORD 100P (NWG) 115.40p 4.06%
BT Group (BT.A) 104.30p 3.99%
Informa (INF) 415.10p 3.75%
Melrose Industries (MRO) 128.15p 3.72%

FTSE 100 - Fallers

Ocado Group (OCDO) 2,431.00p -8.88%
Rentokil Initial (RTO) 523.00p -3.65%
Croda International (CRDA) 6,152.00p -2.75%
Pennon Group (PNN) 1,032.00p -2.64%
Intertek Group (ITRK) 6,240.00p -2.59%
Polymetal International (POLY) 1,650.50p -2.42%
JD Sports Fashion (JD.) 775.00p -2.39%
London Stock Exchange Group (LSE) 9,000.00p -2.34%
Antofagasta (ANTO) 980.60p -2.18%
Experian (EXPN) 2,938.00p -2.03%

FTSE 250 - Risers

Watches of Switzerland Group (WOSG) 420.00p 25.94%
Cineworld Group (CINE) 27.80p 10.32%
TUI AG Reg Shs (DI) (TUI) 313.70p 9.61%
WH Smith (SMWH) 1,026.00p 9.03%
Provident Financial (PFG) 229.40p 8.62%
Greencore Group (GNC) 103.00p 8.42%
easyJet (EZJ) 541.40p 8.24%
Meggitt (MGGT) 293.80p 7.78%
OneSavings Bank (OSB) 301.20p 7.04%
Virgin Money UK (VMUK) 80.86p 6.82%

FTSE 250 - Fallers

IG Group Holdings (IGG) 795.00p -3.64%
Ferrexpo (FXPO) 168.40p -3.22%
Plus500 Ltd (DI) (PLUS) 1,524.00p -3.08%
Softcat (SCT) 1,153.00p -2.86%
Hochschild Mining (HOC) 215.00p -2.36%
Marks & Spencer Group (MKS) 97.52p -2.30%
Morgan Sindall Group (MGNS) 1,194.00p -2.13%
AO World (AO.) 215.50p -2.05%
John Laing Group (JLG) 299.60p -1.77%
XP Power Ltd. (DI) (XPP) 4,570.00p -1.72%