Europe open: Wary investors eye US election uncertainty
European shares were slightly lower as investors tried to digest the tight US election and President Donald Trump’s baseless claim of victory.
The pan-European Stoxx 600 index was down 0.09% at the opening. Tuesday’s positivity evaporated as the predicted landslide towards Democrat Joe Biden failed to materialise as pollsters once again failed to spot Trump’s underlying support.
Trump, predictably, claimed fraud had taken place without offering any evidence, sending Dow Jones futures lower.
“What is going to be interesting is how markets react if Biden does win, but without a blue Senate, hampering his ability to deliver the kind of stimulus investors were banking on,” said Spreadex analyst Connor Campbell.
“Similarly, what will a Trump victory mean for traders? It would potentially see a relief bill passed a lot quicker, but likely in a smaller form than the kind of deal the Democrats would’ve produced.”
Neil Wilson, chief market analyst at Markets.com, said: "He’s played the voter fraud card and this has undoubtedly unsettled markets as a long and protracted battle in the courts is precisely what investors do not want.
"He may yet win this, but it’s clear Trump wants the counting to stop. I fail to see how Trump can mount a serious legal challenge in the Supreme Court against states counting all the ballots cast. This is about delegitimising a Democrat win and has the whiff of desperation."
On home shores, investors were bracing for the month-long national lockdown that comes into effect on Thursday, as Foreign Secretary Dominic Raab said in a statement that it will will definitely end on 2 December.
In equity markets, miners and banking stocks lost ground, with Anglo American, Glencore, Antofagasta, Standard Chartered, HSBC and Lloyds all weaker.
Shares in Danish turbine maker Vestas Wind Systems fell as the company announced a 31% year-on-year increase in third-quarter revenues, but a slightly lower profit.
BMW shares were lower despite the company posting a 10% rise in third-quarter profit thanks to Chinese demand for luxury cars, but the German automaker warned a new wave of coronavirus infections sweeping Europe and the US posed a "considerable" risk to its business.
Retailer Marks & Spencer was firmly in the black 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.
Smurfit Kappa also gained after saying it performance in the third quarter exceeded its expectations. The packaging company said it expected to report annual earnings before interest, tax, depreciation and amortisation between €1.46bn and €1.48bn and that it would pay a second interim dividend of 27.9 cents a share.