London midday: Stocks nudge up as investors mull retail sales
London stocks were a touch firmer by midday on Tuesday as investors weighed up better-than-expected earnings from the likes of BP and HSBC against ongoing concerns about the Covid-19 pandemic and doubts about US stimulus.
The FTSE 100 was up 0.2% at 5,802.12.
CMC Markets analyst Michael Hewson said: "While the prospect of a delay to new US stimulus measures is spooking investors in the US, events in Europe aren’t looking particularly rosy either, with events in France, Spain and Italy suggesting that the virus is starting to run out of control again, as infection rates accelerate exponentially, and hospital admission rates start to rise sharply.
"This has raised the prospect that governments might even consider going down the full lockdown route again, a move that would be economically ruinous even if further fiscal help was available, which at the moment it clearly is not."
Market participants were also increasingly sceptical that any further US stimulus will be forthcoming before the election.
Neil Wilson, chief market analyst at Markets.com, said: "Stimulus seems like a bust before the election after Pelosi and Mnuchin failed to reach agreement on a call on Monday and Mitch McConnell adjourned the Senate until Nov 9th.
"Pre-election volatility would be expected but this is occurring just as we are seeing the average number of new daily cases of coronavirus in the US hitting a record, with former FDA boss Dr Scott Gottlieb warning of an exponential spread of the virus. Strict lockdowns across Europe and the problem of getting fiscal support where it’s need threatens to create a double dip recession."
On home shores, investors mulled the latest survey from the Confederation of British Industry, which showed retail sales fell in October at the fastest since June.
The CBI’s monthly gauge of retail sales fell to -23 in October from +11 in September, missing expectations for a reading of +1. September’s level had marked an 18-month high.
Non-food retailers, department stores, clothing and ‘other normal goods’ were among those reporting a decline in sales, while retailers of furniture, DIY and recreational goods saw strong growth. Internet sales growth also picked back up to the long-run average, the CBI said.
CBI economist Ben Jones said: "The fall in retail sales in October is a warning sign of a further loss of momentum in the economy as coronavirus cases pick up and restrictions are tightened across many parts of the country."
In equity markets, HSBC was sitting pretty at the top of the FTSE 100 after saying it plans to move to a fee-based businesses model as it unveiled a less-than-expected 35% fall in third quarter profits. Pre-tax profit for the three months to 30 September came in at $3.1bn, compared with a $2.07bn average of analysts' estimates compiled by the bank.
The FTSE 350 banks index was up 3.8%.
Oil giant BP was off earlier highs but still in the black as it turned in a profit of $0.1bn on a replacement cost basis, despite a "significantly" lower result in its oil trading arm, following the prior quarter's $6.7bn loss.
Whitbread gained even as the Premier Inn owner revealed that it swung to a loss in the first half after its hotels were closed due to the coronavirus lockdown.
Contracts-for-difference platform Plus500 slid despite reporting a jump in third quarter revenue and earnings amid market volatility, and saying that results for the year are set to be line with market expectations.
Traders pointed to the fact that while customer income during the quarter was the second highest quarterly level in the company’s history, it was down from the record peak levels achieved in the second quarter, with the gradual reduction from peak levels continuing into Q4.
Market Movers
FTSE 100 (UKX) 5,802.12 0.17%
FTSE 250 (MCX) 17,778.65 -0.42%
techMARK (TASX) 3,721.22 -0.14%
FTSE 100 - Risers
HSBC Holdings (HSBA) 340.45p 6.61%
Ocado Group (OCDO) 2,325.00p 2.88%
DCC (DCC) 5,152.00p 2.63%
Fresnillo (FRES) 1,250.00p 2.63%
Rolls-Royce Holdings (RR.) 230.40p 1.90%
Standard Chartered (STAN) 400.20p 1.75%
Intertek Group (ITRK) 5,946.00p 1.71%
Pennon Group (PNN) 1,048.00p 1.65%
Spirax-Sarco Engineering (SPX) 11,510.00p 1.50%
Croda International (CRDA) 6,330.00p 1.38%
FTSE 100 - Fallers
M&G (MNG) 158.35p -4.75%
Legal & General Group (LGEN) 191.10p -2.30%
Smurfit Kappa Group (SKG) 2,984.00p -2.10%
WPP (WPP) 645.20p -2.03%
Standard Life Aberdeen (SLA) 228.30p -2.02%
Next (NXT) 6,136.00p -1.92%
Prudential (PRU) 1,035.50p -1.89%
Glencore (GLEN) 163.26p -1.79%
Persimmon (PSN) 2,474.00p -1.63%
BHP Group (BHP) 1,555.60p -1.54%
FTSE 250 - Risers
888 Holdings (888) 266.50p 3.29%
Virgin Money UK (VMUK) 95.64p 3.08%
Helios Towers (HTWS) 170.20p 3.03%
Frasers Group (FRAS) 403.60p 2.91%
Gamesys Group (GYS) 1,144.00p 2.51%
Games Workshop Group (GAW) 11,150.00p 2.39%
Aston Martin Lagonda Global Holdings (AML) 53.25p 2.11%
AVI Global Trust (AGT) 760.00p 1.88%
PureTech Health (PRTC) 250.50p 1.83%
Domino's Pizza Group (DOM) 335.60p 1.82%
FTSE 250 - Fallers
Plus500 Ltd (DI) (PLUS) 1,490.50p -8.05%
Capita (CPI) 23.75p -6.20%
AO World (AO.) 350.00p -5.02%
Ascential (ASCL) 301.20p -4.62%
RHI Magnesita N.V. (DI) (RHIM) 2,668.00p -4.03%
Babcock International Group (BAB) 237.20p -3.85%
Network International Holdings (NETW) 210.40p -3.84%
Energean (ENOG) 537.00p -3.73%
Crest Nicholson Holdings (CRST) 227.20p -3.15%
Just Group (JUST) 43.90p -3.13%