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London stocks finished higher with investors seemingly brushing off the as yet inconclusive US election results, although a ‘clean sweep’ of the White House and Congress by Democrats was now off the table.
The FTSE 100 rose 1.67% to 5,883.26 and by the end of the session, cyclical areas of the market, including Industrial Transportation and Software stocks had joined so-called defensive sectors like big pharma and health care equipment near the top of the sector leaderboard.
“Tensions surrounding the situation have faded, especially now that President Trump has been less aggressive in relation to how the postal voting situation could play out,” said David Madden, senior market analyst at CMC Markets UK.
“Earlier this morning, the US President basically indicated he would contest the result of the overall election if he loses because of a surge in postal votes for Mr Biden. Things have calmed down on that front, but we will not know the results from Michigan or Wisconsin anytime soon, and the Pennsylvania tally might not be known until next week. Dealers have gotten over the initially political uncertainty and the bullish sentiment from earlier in the week is in play.”
According to the latest reports, Democrat Joe Biden has edged ahead with 227 Electoral College votes to Republican Donald Trump’s 213. They need at least 270 votes out of 538 to win the presidency.
On home shores, a survey released earlier suggested the economy was headed for a double-dip recession, with activity in the services sector slowing in October. The IHS/Markit CIPS services purchasing managers’ index fell to 51.4 from 56.1 in September. This was below the flash reading of 52.3 and marked the worst level since June. However, it was still above the 50.0 mark that separates contraction from expansion.
The composite PMI, which includes the manufacturing sector, fell to 52.1 in October from 56.5, hitting the lowest level in four months.
Tim Moore, economics director at IHS Markit, said: “October data indicates that the UK service sector was close to stalling even before the announcement of lockdown 2 in England, with tighter restrictions on hospitality, travel and leisure leading to a slump in demand for consumer-facing businesses.”
Moore said the upcoming lockdown and a worsening Covid-19 situation across the rest of Europe mean the UK economy appears to be “on course for a double-dip recession this winter and a far more challenging path to recovery in 2021”.
In UK equity markets, Defensives such as AstraZeneca, British American Tobacco and GlaxoSmithKline all higher.
Earlier, it was reported that hospitals in England had been placed on alert for a potential start to the roll-out of a Covid-19 vaccine this side of Christmas.
Banks however were under the cosh, with Standard Chartered, HSBC and Lloyds weaker, while miners also lost ground, amid ‘market chatter’ that the possibility of a big fiscal stimulus package in the US was now lower.
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.
Retailer Marks & Spencer rallied 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.
Richard Hunter, head of markets at Interactive Investor, said: “While an historic loss cannot be ignored, Marks & Spencer is working at pace to transform its business and there are some signs of early success.
“The streamlining is likely to result in annualised cost savings of £115 million, the online channel is receiving particular attention to modernise the overall offering and the Food business has maintained its position as a positive contributor to the business.”
Morgan Sindall also advanced after the construction and regeneration group said its full-year performance was set to be slightly above the top end of its guided range and reinstated its dividend.
Market Movers
FTSE 100 (UKX) 5,883.26 1.67%
FTSE 250 (MCX) 17,796.08 1.74%
techMARK (TASX) 3,757.65 3.07%
FTSE 100 – Risers
AstraZeneca (AZN) 8,511.00p 6.88%
Avast (AVST) 500.00p 6.29%
Ocado Group (OCDO) 2,561.00p 5.39%
Next (NXT) 6,092.00p 5.22%
Auto Trader Group (AUTO) 594.40p 4.68%
JD Sports Fashion (JD.) 737.20p 4.63%
Rentokil Initial (RTO) 564.20p 4.60%
London Stock Exchange Group (LSE) 8,710.00p 4.51%
Rightmove (RMV) 652.40p 4.45%
Flutter Entertainment (FLTR) 13,725.00p 4.41%
FTSE 100 – Fallers
Standard Chartered (STAN) 354.90p -4.72%
CRH (CRH) 2,820.00p -4.41%
HSBC Holdings (HSBA) 332.45p -4.15%
Barclays (BARC) 110.38p -2.63%
Lloyds Banking Group (LLOY) 28.52p -2.48%
Antofagasta (ANTO) 1,020.50p -2.25%
NATWEST GROUP PLC ORD 100P (NWG) 126.00p -2.17%
Ashtead Group (AHT) 2,977.00p -1.85%
Evraz (EVR) 360.20p -1.56%
BT Group (BT.A) 99.42p -1.52%
FTSE 250 – Risers
Royal Mail (RMG) 252.50p 8.00%
Morgan Sindall Group (MGNS) 1,250.00p 7.39%
Worldwide Healthcare Trust (WWH) 3,715.00p 7.05%
TUI AG Reg Shs (DI) (TUI) 321.40p 6.64%
FirstGroup (FGP) 43.92p 6.19%
National Express Group (NEX) 161.60p 6.11%
Pershing Square Holdings Ltd NPV (PSH) 2,205.00p 5.71%
Countryside Properties (CSP) 367.00p 5.64%
Premier Foods (PFD) 103.60p 5.39%
C&C Group (CCR) 152.60p 5.24%
FTSE 250 – Fallers
IWG (IWG) 265.20p -4.33%
AO World (AO.) 386.00p -3.86%
Chemring Group (CHG) 263.50p -3.48%
Serco Group (SRP) 107.20p -3.07%
Domino’s Pizza Group (DOM) 326.00p -2.63%
Centamin (DI) (CEY) 126.95p -2.46%
Just Group (JUST) 41.92p -2.19%
Diversified Gas & Oil (DGOC) 112.60p -2.09%
TI Fluid Systems (TIFS) 192.64p -1.77%
Petrofac Ltd. (PFC) 120.40p -1.75%
