London close: Stocks turn negative as Americans head to the polls

The FTSE 100 index slipped 0.14% to end at 8,172.39 points, while the FTSE 250 shed 0.45%, closing at 20,370.04 points.

In currency markets, sterling was last up 0.52% on the dollar to trade at $1.3024, while it gained 0.1% against the euro, changing hands at €1.1923.

“US markets aren’t showing many signs of nervousness as voting gets underway,” said IG chief market analyst Chris Beauchamp.

“While the political tension in the US has been ratcheted up to a high level, the market has remained calm, showing some of the usual pre-election weakness but otherwise holding steady.

“A clear winner within the next day would be the ideal outcome here, while a long, drawn-out legal challenge is likely to keep bullish sentiment in check.”

Beauchamp added that the prospect of supply disruptions in the US due to weather and poor earnings from Aramco had combined to drive crude prices higher for another day.

“Aramco’s results signal further pressures ahead for Saudi Arabia’s oil giant, and questions will now be asked about its dividend, which is rapidly consuming the firm’s cash pile.

“A production cut to juice oil prices would do much to bolster cash flow.”

UK retail sales and service sector growth slows

In economic news, UK retail sales edged up by 0.6% year-on-year in October, according to data from the British Retail Consortium and KPMG, marking a slower increase than the 2.6% growth observed a year ago and falling short of recent average gains.

Food sales showed some resilience with a 2.9% year-on-year rise over the past three months, though that was notably below last October's surge.

Non-food sales continued to struggle, with a slight decline of 0.1% year-on-year over the three-month period, a mild improvement over the previous year's 1.0% drop.

“After a good start to autumn, October’s sales growth was disappointing,” said BRC chief executive officer Helen Dickinson.

“This was partly driven by half term falling a week later this year, depressing the October figures, and November sales will likely see more of a boost.

“Uncertainty during the run-up to the Budget, coupled with rising energy bills, also spooked some consumers.”

In the UK service sector, growth slowed to its lowest rate in nearly a year, with S&P Global’s purchasing managers’ index slipping to 52.0 in October from 52.4 in September.

Although above economist forecasts, it reflected cautious spending ahead of the Autumn Budget and ongoing geopolitical uncertainties.

Companies reported longer sales conversion cycles and cited budget constraints due to higher wages, leading to a dip in staffing levels.

Nevertheless, export sales saw their strongest rise since March, buoyed by demand from EU clients despite Brexit-related trade frictions.

“The wait for clarity on government policy ahead of the Autumn Budget was widely reported to have weighed on business confidence and spending,” said Tim Moore, the economics director at S&P Global Market Intelligence.

“Broader geopolitical concerns and forthcoming US elections also added to a sense of wait-and-see on business investment decisions in October.

“At the same time, cost of living pressures remained a constraint on household spending.”

Across the Atlantic, the US trade deficit widened to its largest in 30 months in September, reaching -$84.4bn as businesses increased imports ahead of a potential strike at American ports.

Imports surged to a record $352.3bn, while exports fell by 1.2%, aligning with economists' expectations.

Meanwhile, US services sector activity remained robust in October.

The Institute for Supply Management reported a rise in its services PMI to 56.0 from 54.9 in September, indicating strong expansion.

Sub-indices for new orders and employment also showed positive movement, with employment rebounding above the 50.0 expansion mark.

In Asia, the Reserve Bank of Australia maintained its cash rate at 4.35%, holding its restrictive stance amid persistently high core inflation.

China’s services sector also showed improvement, with the Caixin services PMI rising to 52.0, marking a three-month high and exceeding expectations for moderate growth.

Water companies in the green, Schroders plunges on weak quarter

On London’s equity markets, Melrose Industries rose 5.19% after Citi reiterated its “high conviction” in a buy rating, highlighting Melrose’s favourable valuation and promising mid-term cash flow prospects.

Water companies also saw significant gains, with Severn Trent up 2.76%, United Utilities rising 3.16%, and Pennon climbing 3.94% as Citi and JPMorgan issued positive assessments ahead of Ofwat’s upcoming final determinations.

Vodafone Group advanced 1.57% following an update from the Competition and Markets Authority indicating that its merger with Hutchison's Three UK could proceed pending appropriate remedies.

Primark owner Associated British Foods gained 2.45% after reporting a 33% increase in full-year adjusted pre-tax profit and announcing a special dividend, supported by revenue growth across both its retail and food divisions.

TP ICAP Group surged 7.03% as the interdealer broker posted record third-quarter revenue, driven by strong results in its global broking and Liquidnet segments.

International Workplace Group also rose by 3.1%, buoyed by increased revenues and robust expansion in its managed and franchised office segments.

On the downside, Schroders fell sharply by 13.7% after reporting third-quarter net outflows of £2.3bn, while Morgan Advanced Materials slipped 2.05% following a trading update.

Burberry Group declined by 3.36%, pulling back from prior gains amid unconfirmed takeover rumours by Italy’s Moncler, which the latter described as “unsubstantiated”.

Close Brothers Group dropped 2.48% after RBC Capital Markets reduced its price target and raised concerns over potential litigation risks in premium finance.

Hilton Food Group edged down 1.91% despite meeting third-quarter expectations, with solid performance across its operating regions.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 8,172.39 -0.14%
FTSE 250 (MCX) 20,370.04 -0.45%
techMARK (TASX) 4,563.94 -1.07%

FTSE 100 - Risers

Melrose Industries (MRO) 498.80p 5.19%
3i Group (III) 3,340.00p 4.34%
BT Group (BT.A) 147.40p 3.69%
Associated British Foods (ABF) 2,362.00p 3.19%
United Utilities Group (UU.) 1,059.50p 3.16%
Severn Trent (SVT) 2,648.00p 3.04%
Rentokil Initial (RTO) 397.60p 2.95%
BAE Systems (BA.) 1,280.00p 2.85%
Ashtead Group (AHT) 5,968.00p 2.54%
Pearson (PSON) 1,185.00p 2.51%

FTSE 100 - Fallers

Schroders (SDR) 314.60p -13.70%
AstraZeneca (AZN) 10,114.00p -8.40%
Hikma Pharmaceuticals (HIK) 1,830.00p -1.94%
GSK (GSK) 1,391.50p -1.59%
Land Securities Group (LAND) 595.00p -1.41%
Flutter Entertainment (DI) (FLTR) 17,485.00p -1.38%
Entain (ENT) 727.00p -1.36%
JD Sports Fashion (JD.) 124.55p -1.24%
Croda International (CRDA) 3,720.00p -1.14%
Haleon (HLN) 368.50p -0.94%

FTSE 250 - Risers

TP Icap Group (TCAP) 243.50p 7.03%
Ithaca Energy (ITH) 102.20p 3.97%
International Workplace Group (IWG) 166.10p 3.10%
Senior (SNR) 139.60p 3.10%
Pennon Group (PNN) 555.00p 2.97%
Aston Martin Lagonda Global Holdings (AML) 120.60p 2.64%
Bank of Georgia Group (BGEO) 4,370.00p 2.58%
Morgan Advanced Materials (MGAM) 248.50p 2.05%
Hochschild Mining (HOC) 236.00p 1.72%
4Imprint Group (FOUR) 5,090.00p 1.60%

FTSE 250 - Fallers

Genus (GNS) 1,980.00p -4.12%
Burberry Group (BRBY) 817.20p -3.97%
Auction Technology Group (ATG) 452.00p -3.83%
GCP Infrastructure Investments Ltd (GCP) 70.30p -3.17%
SDCL Energy Efficiency Income Trust (SEIT) 56.10p -2.94%
VinaCapital Vietnam Opportunity Fund Ltd. (VOF) 437.00p -2.89%
Edinburgh Worldwide Inv Trust (EWI) 156.00p -2.50%
Close Brothers Group (CBG) 220.20p -2.48%
AO World (AO.) 104.00p -2.44%
SSP Group (SSPG) 158.10p -2.41%