London open: Stocks little changed amid US election uncertainty

London stocks were little changed in early trade on Wednesday as exporters such as AstraZeneca and BAT were boosted by a weaker pound, with US election results too close to call.

At 0840 GMT, the FTSE 100 was down just 0.1% at 5,783.21 following a volatile open, as market participants reacted calmly to the absence of a ‘blue wave’ sweep for the Democrats.

So far, Democrat Joe Biden has 225 Electoral College votes, while Republican Trump has 213. They need at least 270 votes out of 538 to win the presidency.

Despite no clear result, Trump declared victory over Biden and said that any challenge to this would be "fraud on the American public". With final votes yet to be tallied in several swing states, Trump said he will ask the Supreme Court to stop all vote counting.

Neil Wilson, chief market analyst at Markets.com, said: "He’s played the voter fraud card and this has undoubtedly unsettled markets as a long and protracted battle in the courts is precisely what investors do not want.

"He may yet win this, but it’s clear Trump wants the counting to stop. I fail to see how Trump can mount a serious legal challenge in the Supreme Court against states counting all the ballots cast. This is about delegitimising a Democrat win and has the whiff of desperation."

Spreadex analyst Connor Campbell said: "On Tuesday investors were acting like a Biden win was a foregone conclusion, with a blue wave set to deliver a huge stimulus package. Now the Democrats are unlikely to take the Senate, and many UK bookmakers have Trump odds on to the win the election.

"And with two major counties in Pennsylvania reporting their last updates of the evening, the markets are facing a session filled with uncertainty as to who will be the next President of the United States.

"What is going to be interesting is how markets react if Biden does win, but without a blue Senate, hampering his ability to deliver the kind of stimulus investors were banking on. Similarly, what will a Trump victory mean for traders? It would potentially see a relief bill passed a lot quicker, but likely in a smaller form than the kind of deal the Democrats would’ve produced."

On home shores, investors were bracing for the month-long national lockdown that comes into effect on Thursday, as Foreign Secretary Dominic Raab said in a statement that it will will definitely end on 2 December.

In equity markets, miners and banking stocks lost ground, with Anglo American, Glencore, Antofagasta, Standard Chartered, HSBC and Lloyds all weaker.

On the upside, weakness in the pound - which was down 1% against the dollar at 1.2926 - boosted exporters, with AstraZeneca, British American Tobacco and GlaxoSmithKline all higher.

Retailer Marks & Spencer was firmly in the black despite saying that it swung to a half-year loss as coronavirus lockdowns hit its clothing division. The company posted a pre-tax loss of £87.6m from a profit of £159m a year earlier.

Smurfit Kappa also gained after saying it performance in the third quarter exceeded its expectations. The packaging company said it expected to report annual earnings before interest, tax, depreciation and amortisation between €1.46bn and €1.48bn and that it would pay a second interim dividend of 27.9 cents a share.

Royal Mail was the top performer on the FTSE 250 after an upgrade to ‘overweight’ at JPMorgan, while Big Yellow was boosted by a double upgrade to ‘overweight’ by the same outfit.

Morgan Sindall rallied after the construction and regeneration group said its full-year performance was set to be slightly above the top end of its guided range as momentum has continued to increase following Covid-related disruption in the first half. It also reinstated its dividend.

Market Movers

FTSE 100 (UKX) 5,783.21 -0.06%
FTSE 250 (MCX) 17,538.94 0.27%
techMARK (TASX) 3,685.86 1.11%

FTSE 100 - Risers

AstraZeneca (AZN) 8,257.00p 3.69%
Hikma Pharmaceuticals (HIK) 2,664.00p 3.06%
British American Tobacco (BATS) 2,564.50p 3.05%
Just Eat Takeaway.Com N.V. (CDI) (JET) 8,898.00p 3.03%
Avast (AVST) 484.40p 2.98%
Smurfit Kappa Group (SKG) 3,180.00p 2.78%
BAE Systems (BA.) 440.90p 2.53%
Aveva Group (AVV) 4,333.00p 2.19%
GlaxoSmithKline (GSK) 1,385.40p 2.17%
Scottish Mortgage Inv Trust (SMT) 1,044.00p 2.15%

FTSE 100 - Fallers

Standard Chartered (STAN) 352.00p -5.50%
CRH (CRH) 2,819.00p -4.44%
HSBC Holdings (HSBA) 332.10p -4.25%
Rolls-Royce Holdings (RR.) 81.46p -3.02%
Glencore (GLEN) 156.70p -2.50%
Melrose Industries (MRO) 125.50p -2.49%
Anglo American (AAL) 1,839.20p -2.42%
Antofagasta (ANTO) 1,021.00p -2.20%
Evraz (EVR) 358.10p -2.13%
Legal & General Group (LGEN) 187.40p -2.06%

FTSE 250 - Risers

Royal Mail (RMG) 257.50p 10.14%
Morgan Sindall Group (MGNS) 1,218.00p 4.64%
PureTech Health (PRTC) 261.00p 4.19%
Calisen (CLSN) 173.40p 3.93%
Just Eat Takeaway.Com N.V. (CDI) (JET) 8,898.00p 3.03%
Provident Financial (PFG) 240.20p 2.91%
Wetherspoon (J.D.) (JDW) 927.50p 2.83%
Allianz Technology Trust (ATT) 2,595.00p 2.77%
TUI AG Reg Shs (DI) (TUI) 309.50p 2.69%
Pershing Square Holdings Ltd NPV (PSH) 2,155.00p 2.62%

FTSE 250 - Fallers

BMO Global Smaller Companies (BGSC) 121.80p -2.56%
FDM Group (Holdings) (FDM) 993.00p -2.46%
IWG (IWG) 270.40p -2.45%
Investec (INVP) 150.25p -2.05%
Just Group (JUST) 41.98p -2.05%
WH Smith (SMWH) 1,012.00p -1.84%
St. Modwen Properties (SMP) 329.00p -1.79%
Capita (CPI) 24.50p -1.76%
Finsbury Growth & Income Trust (FGT) 784.00p -1.75%
JPMorgan Euro Small Co. Trust (JESC) 393.00p -1.75%