London close: FTSE ends higher as markets eye US election

The FTSE 100 closed in the green on Tuesday as investors awaited the outcome of the US presidential election and weighed economic data.

London’s top tier index rose 0.53% to 6,843.13 points while the pound increased 0.10% versus the dollar at $1.2409.

Oil prices wavered after OPEC said demand for crude could peak within 13 years if the Paris climate agreement targets are enforced. Separately, OPEC secretary general Mohammed Barkindo said at a conference in Abu Dhabi that members of the cartel will come to an agreement in Vienna later this month to curb output.

Brent crude fell 0.08% to $46.11 per barrel while West Texas Intermediate climbed 0.11% to $44.94 per barrel at 1626 GMT.

Meanwhile, all eyes are on the US election with the latest polls and many analysts pointing to a win by Democratic candidate Hillary Clinton over Republican rival Donald Trump.

According to the last RealClearPolitics average of polls, Clinton had a three-point lead over Trump. IG's binary market prices an 81.5% chance Clinton will win, from 74% at the weekend.

IG’s Chris Beauchamp said: “The Brexit vote has taught us to expect significant volatility, especially as key swing states come in, with thinner overnight markets likely to intensify the moves. It promises to be an interesting few hours.”

On the data front, the Office for National Statistics said UK manufacturing production rose 0.6% in September compared to a month ago, up from August’s 0.2% increase. Economists had expected a 0.4% increase.

In contrast, UK industrial production fell 0.4% in September for the second consecutive month, the ONS said, versus the consensus estimate for a flat reading.

"Looking ahead, the upbeat tone of the latest business surveys suggests that the manufacturing sector will sustain its recent strength in the final quarter," said Ruth Gregory, UK economist at Capital Economics.

"Indeed, the fall in the pound appears to be performing its role as a 'shock absorber' in the wake of the Brexit vote, by improving the competitiveness of domestic producers."

Data from the British Retail Consortium and KPMG showed UK like-for-like sales increased 1.7% in October, up from the 0.4% rise the month before.

The National Institute of Economic and Social Research said it estimates gross domestic product in the UK rose 0.4% in the three months to October after 0.5% growth in the three months ended September.

GDP is forecast to rise 2.0% in 2016 and 1.4% in 2017 while consumer price inflation is estimated to reach 3.8% next year as a weaker pound after Brexit makes imports more expensive.

Elsewhere, China exports and imports fell more than expected in October. Exports fell 7.3% from a year earlier while imports shrank 1.4%, according to official data. Economists had expected a 6% decline in exports and a 1% drop in imports. The trade surplus widened to $49.06bn in October from $41.99bn, missing forecasts of $51.70bn.

German industrial output dropped 1.8% on the month in September, with manufacturing output down 1.7% and construction output down 1.5%, according to Destatis. Analysts had been expecting a smaller drop of 0.6% in total output.

The adjusted trade surplus in Germany came in lower than expected at €21.3bn in September, compared to €22.2bn in August.

In company news, Associated British Foods was the standout gainer after it reported a rise in full-year revenue as it expanded the selling space of Primark and benefited from the weakening of the pound, although like-for-like sales were lower.

Private healthcare company Mediclinic was on the front foot after Renaissance Capital lifted its stance on the stock to ‘buy’ from ‘hold’.

Budget airline EasyJet flew higher despite Numis cutting its price target on the hold-rated stock to 1,050p from 1,200p ahead of its full-year prelims next week.

Retailer Marks & Spencer was under the cosh after holding its interim dividend flat as first-half profits plunged as new chief executive Steve Rowe closed the defined benefit pension scheme and announced a £550m investment plan to close 113 stores I the UK and overseas.

Tobacco company Imperial Brands was weaker after it reported a drop in profit for the year to end of September, but said revenue rose and upped its dividend by 10%.

Royal Bank of Scotland was on the back foot after agreeing to refund around £400m of fees to smaller business customers hit by failings at the bank’s former Global Restructuring Group subsidiary, while also launching a new complaints process to be overseen by a retired High Court judge.

Market Movers

FTSE 100 (UKX) 6,843.13 0.53%
FTSE 250 (MCX) 17,447.79 -0.06%
techMARK (TASX) 3,300.66 -0.03%

FTSE 100 - Risers

Associated British Foods (ABF) 2,631.00p 5.71%
BHP Billiton (BLT) 1,277.50p 4.58%
Antofagasta (ANTO) 589.00p 4.25%
Mediclinic International (MDC) 931.50p 2.70%
Anglo American (AAL) 1,152.50p 2.67%
Old Mutual (OML) 197.60p 2.17%
easyJet (EZJ) 1,016.00p 2.16%
Mondi (MNDI) 1,611.00p 1.96%
CRH (CRH) 2,650.00p 1.84%
Rio Tinto (RIO) 2,872.00p 1.66%

FTSE 100 - Fallers

Marks & Spencer Group (MKS) 331.00p -5.16%
Imperial Brands (IMB) 3,689.50p -2.98%
Barratt Developments (BDEV) 454.50p -1.62%
Persimmon (PSN) 1,663.00p -1.48%
London Stock Exchange Group (LSE) 2,732.00p -1.12%
Travis Perkins (TPK) 1,350.00p -1.03%
International Consolidated Airlines Group SA (CDI) (IAG) 440.80p -1.01%
Shire Plc (SHP) 4,522.00p -0.83%
Smith & Nephew (SN.) 1,135.00p -0.79%
Rolls-Royce Holdings (RR.) 718.50p -0.76%

FTSE 250 - Risers

Evraz (EVR) 208.40p 5.15%
Tullett Prebon (TLPR) 406.50p 2.76%
Beazley (BEZ) 372.50p 2.62%
Unite Group (UTG) 571.50p 2.05%
Atkins (WS) (ATK) 1,559.00p 1.96%
Investec (INVP) 508.00p 1.91%
Aldermore Group (ALD) 187.00p 1.80%
Grainger (GRI) 222.10p 1.69%
Lancashire Holdings Limited (LRE) 737.50p 1.58%
Aberdeen Asset Management (ADN) 311.30p 1.57%

FTSE 250 - Fallers

AO World (AO.) 159.00p -5.53%
Jardine Lloyd Thompson Group (JLT) 980.50p -3.97%
Sports Direct International (SPD) 313.80p -3.45%
Tullow Oil (TLW) 257.30p -3.34%
Paysafe Group (PAYS) 417.10p -3.05%
McCarthy & Stone (MCS) 169.00p -2.76%
JRP Group (JRP) 116.90p -2.50%
IP Group (IPO) 140.30p -2.43%
Rank Group (RNK) 195.80p -2.25%
Laird (LRD) 135.90p -2.23%