Europe midday: Stocks flat ahead of Wall St view on US debate
European stocks firmed slightly at lunchtime on Wednesday as investors tried to make sense of a less-than-edifying US presidential debate and looked for cues from Wall Street while the continuing surge in Covid-19 infections also weighed.
The pan-European STOXX 600 index was flat after a chaotic overnight encounter between US President Donald Trump and Democratic challenger Joe Biden – described by one observer as “the worst job interviews in recorded history”.
US stockmarket futures were pointing to a lower start in the last trading session of the third quarter.
The debate was long on shouting, insults and interruption, and very short on any concrete policy proposals. Trump disrupted Biden from the start in a clear attempt to steer clear of any meaningful discussion on his four years in office and handling of the coronavirus pandemic that has so far killed more than 200,000 Americans.
“With less than five-weeks left until the election, we are seeing a president that increasingly speaks of voter fraud which appears to show a candidate laying the groundwork for defeat,” said Josh Mahony of IG.
“From a market perspective, while Biden is likely to be more than willing to spend freely in a bid to reduce inequalities, there is also a worry that he will be significantly less business and investor friendly.”
On the markets, major European bourses were also flat, with London’s FTSE 100 flirting with positive territory as Britain reported 7,143 new coronavirus cases on Tuesday, the highest single figure to date as the government’s ineffectual testing system attracted growing criticism.
In corporate news, shares in UK interdealer broker TP ICAP topped the losers board, falling more than 13% as the company on Tuesday revealed it was in advanced talks on the potential acquisition of New York-based electronic trading network Liquidnet Holdings for $600m - $700m.
Analysts at Cannacord Genuity downgraded their recommendation and target price for TP Icap, judging the purchase would be 12% earnings dilutive, leading it to lower its earnings per share estimates for 2021 and 2022 to 33.9p and 34.4p, respectively.
The broker downgraded its recommendation for the company's shares from to 'hold' from 'buy' and slashed their target price to 275.0p from 401.0p.
Germany's Covestro fell 7% on news that the company was buying Dutch peer DSM's Resins and Functional Materials business for about €1.6bn. Analysts questioned planned annual synergies of €120m targeted by Covestro by 2025, €80m from lower costs and the rest from new revenue opportunities.
Shares in UK catering company Compass Group were lower after the company said it expects 2020 revenue to fall by almost a fifth and take a £100m impairment charge on assets.
French waste and water management company Suez jumped more than 4% after rival Veolia lifted its offer to 18 euros a share from 15.5 euros to buy a 29.9% stake in the company. Veolia shares were up 1% on the news.
William Hill shares fell slightly as the betting firm agreed to be taken over by Caesars Entertainment in a £2.9bn deal that would see the enlarged group cash in on the rapidly expanding US sports betting market.
Royal Dutch Shell shares rose after the company said it was cutting 7,000 - 9,000 jobs globally as it responded to the global slump in oil prices and looked to reposition itself as a green energy provider.
Online gambling company 888 Holdings saw its stock soar 22% after raising full year guidance and declaring a special dividend as first-half profits more than doubled on the back of higher casino revenues and customer growth.