London close: Stocks weaker ahead of Trump-Biden debate
London stocks finished weaker on Tuesday, with investors choosing to sit on their hands ahead of an eagerly-awaited televised debate in the evening between US President Donald Trump and the Democratic contender for the White House, Joe Biden.
The FTSE 100 ended the session down 0.51% at 5,897.50, and the FTSE 250 was off 1.13% at 17,173.66.
Sterling was mixed, last gaining 0.16% on the dollar to $1.2855, but losing 0.42% against the euro at €1.0955.
“Traders have approached today with a somewhat hesitant stance, with the upcoming presidential debate driving risk-off sentiment,” said IG senior market analyst Joshua Mahony.
“Coming during a period of uncertainty, the recovery seen on either side of the weekend are faltering once more after a negative open for US markets.”
From a European perspective, Mahony noted that Germany remained the outperformer.
“Meanwhile, the continued fears of a second -wave in the UK brings yet another day of underperformance for the domestically-focused FTSE 250.
“While yesterday’s buy-the-dip mentality brought about the best day for European stocks in three months, the losses of today highlight the volatility and uncertainty that will likely dominate as we move forward.”
Investors were also keeping close tabs on any fresh headlines around the ongoing Brexit talks.
Pantheon Macroeconomics said investors have kept their faith that a deal will be agreed and remained slightly net long sterling.
"This is in contrast to last year, when investors positioned for the pound to decline further. We continue to think that investors are right to anticipate a deal - we still see only a 20% chance of no-deal - though we expect negotiations to continue deep into the fourth quarter," it said.
Mortgage approvals data from the Bank of England for August also surprised to the upside, printing at 84,700 - a 13-year high, and ahead of expectations for 71,300.
In corporate news, British Airways owner IAG was down 3.6%, engine maker Rolls-Royce lost 5.93% and GKN owner Melrose was in the red by 2.25%, as investors continue to fret about the impact of the Covid-19 crisis and restrictions on the airline industry.
Other travel-related stocks were under the cosh, with Upper Crust owner SSP falling 9.66%, budget airline easyJet descending 3.13%, and travel company TUI 3.01% weaker.
Cineworld was down 8.08% as well after S&P cut its rating on the cinema operator's long-term debt to CCC- in anticipation of liquidity pressures.
Elsewhere, fashion retailer Next was knocked 1.57% lower by a downgrade to ‘sell’ from ‘hold’ at Berenberg.
High Street baker Greggs fell 8.12% as it warned of job cuts in the face of expected lower demand and the closure of the government’s Job Retention Scheme ends next month.
The company said like-for-like sales in company-managed shops averaged 76.1% of 2019 levels in the four weeks to September 26 - in line with planning assumptions.
On the upside, plumbing and heating products distributor Ferguson rallied 6.01% after it posted a small drop in full-year profit and revenue but said it was reinstating its dividend after better-than-expected recent trading and announced the appointment of a new chief financial officer.
Discount retailer B&M European Value Retail rose 4.17% after it said first-half group adjusted earnings before interest, tax, depreciation and amortisation were set to be above its previously-guided range following strong sales.
Insurers were in focus after the Financial Conduct Authority said it had filed an appeal in a test case on business interruption claims related to the Covid-19 pandemic in case insurers failed to reach a deal on payouts to policyholders by Wednesday.
The FCA said discussions continued "at speed" with the eight insurers and two intervenors that took part in a test case to reach an agreement in principle on a range of issues to avoid an appeal.
RSA was down 1.94%, after it said it had sought leave to appeal and that a court hearing in relation to the appeal applications would take place on 2 October, while Hiscox lost 0.97% after confirming it had prepared to apply for an expedited appeal, adding that it "has not yet made a decision on whether it will seek to appeal".
FTSE 100 - Risers
Ferguson (FERG) 7,862.00p 6.01%
B&M European Value Retail S.A. (DI) (BME) 510.20p 4.04%
GVC Holdings (GVC) 1,011.50p 3.96%
National Grid (NG.) 887.00p 3.95%
Smurfit Kappa Group (SKG) 3,092.00p 3.63%
Mondi (MNDI) 1,654.00p 3.47%
Fresnillo (FRES) 1,197.00p 2.51%
Smiths Group (SMIN) 1,376.00p 2.23%
SSE (SSE) 1,212.00p 2.23%
Ashtead Group (AHT) 2,833.00p 2.16%
FTSE 100 - Fallers
Rolls-Royce Holdings (RR.) 141.25p -5.93%
British Land Company (BLND) 331.10p -4.22%
International Consolidated Airlines Group SA (CDI) (IAG) 91.00p -3.60%
HSBC Holdings (HSBA) 298.50p -3.26%
Land Securities Group (LAND) 512.40p -3.12%
Whitbread (WTB) 2,108.00p -3.00%
Sainsbury (J) (SBRY) 193.45p -2.97%
Standard Chartered (STAN) 351.70p -2.85%
BT Group (BT.A) 97.86p -2.43%
SEGRO (SGRO) 931.20p -2.41%
FTSE 250 - Risers
Fisher (James) & Sons (FSJ) 1,156.00p 3.96%
Pets at Home Group (PETS) 408.00p 3.84%
Hochschild Mining (HOC) 218.40p 3.51%
Mediclinic International (MDC) 275.20p 3.30%
Future (FUTR) 1,954.00p 3.06%
TI Fluid Systems (TIFS) 147.30p 2.26%
Centamin (DI) (CEY) 203.60p 2.03%
Airtel Africa (AAF) 60.50p 1.84%
888 Holdings (888) 208.50p 1.71%
AO World (AO.) 213.50p 1.67%
FTSE 250 - Fallers
SSP Group (SSPG) 185.20p -9.66%
Greggs (GRG) 1,120.00p -8.12%
Cineworld Group (CINE) 40.10p -8.08%
Shaftesbury (SHB) 474.40p -7.79%
Rank Group (RNK) 95.90p -5.98%
Vectura Group (VEC) 104.20p -5.96%
OneSavings Bank (OSB) 270.80p -5.38%
Mitchells & Butlers (MAB) 133.40p -5.12%
Wetherspoon (J.D.) (JDW) 831.50p -5.07%
Greencore Group (GNC) 100.00p -5.03%