FTSE 100 shares ended firmer on Tuesday as a last-minute rush to buy framed a session of cautious optimism in a victory for Hillary Clinton in the US presidential election.
Polling was underway and turnout was estimated to be high, compared with a historical average of just over 50% in previous elections.
The blue-chip FTSE 100 ended up 0.5%, or 36 points, at 6843 and led by Associated British Foods plc (LON:ABF), up 5.8% at 2634p after reporting a rise in full-year revenue as it expanded the selling space of discount clothing retailer Primark and benefited from the weakening of sterling, though like-for-like sales were lower.
Miners also did well, taking second and third place, with BHP Billiton plc (LON:BLT) up 4.7% at 1279p and Antofagasta Holdings (LON:ANTO) up 4.3% at 589p. Copper headed for bull-market territory on Tuesday, with prices rising to their highest levels in almost a year to close at $5,235 a tonne. The red metal has risen over 20% since hitting a low of $4,318 a tonne in January on signs of better demand in China and less of a surplus in mine supply than previously thought
Leading the laggards was retailer Marks & Spencer Group plc (LON:MKS), down 5.2% to 331.7p after first-half profits plunged as new chief executive Steve Rowe closed the defined benefit pension scheme – a very rare and generous investment vehicle in the UK these days - and announced a £550mln investment plan to close 113 stores in the UK and overseas to try and return the retailer to profitable growth.
As a face-saving manoeuvre the company held its interim dividend flat.
Meanwhile, mid-caps wobbled with the FTSE 250 closing down 0.06% to 17,447 and led by white appliance online retailer AO World plc (LON:AO.), down 5.5% to 162.2p.
The FTSE AIM 100 Index closed 0.3% higher at 3838 and led by Redcentric plc (LON:RCN) up 9.1% at 69p.
Meanwhile, the FTSE AIM All-Share Index ended down 0.05% at 801.
A total of 26% of London stocks gained this session versus 37% that lost.
Attention now turns to whether anyone who scheduled corporate news for Wednesday, the morning when we find out who – if anyone – has won the US presidential race, will be seeking to bury bad news. Read more.
Late session
Trump vs Clinton, polls open stateside
Wall Street benchmarks start election day on back foot
FTSE 100 up 5 at 6,812
Marks & Spencer to close 60 stores as profits slump
Primark expansion drives revenue growth for Associated British Food
US equity markets started election day lower, albeit only slightly with the Dow Jones giving up 23 points (0.13%) to 18,236.
The S&P 500 was down 0.18% to 2,127 while the Nasdaq dipped 0.15% to 5,158.
London’s FTSE 100 was up 20 points, up 0.3%, to 6,827.
Primark owner Associated British Foods Plc (LON:ABF) rose 6.4% to £26.47 while high street neighbour Marks & Spencer Plc (LON:MKS) ditched 6.5% to 326p.
Tobacco firm Imperial Brands Plc (LON:IMB) shares dropped 3.3% to £36.75 per share.
Rolls-Royce Group Plc (LON:RR.) and British Airways parent International Consolidated Airlines Group (LON:IAG) were among the day’s fallers.
Housebuilders Barratt Developments Plc (LON:BDEV), Persimmon Plc (LON:PSN), and Travis Perkins Plc (LON:TPK) were also lit in red.
Go for oil if Clinton wins - 12.35pm
Societe Generale suggests the oil sector may be a good bet if Hillary Clinton wins.
Her track record suggests she will be more interventionist than Obama, a stance that can support oil prices, defence and oil & gas stocks and oil-related currencies, says the French bank.
Unsurprisingly a Donald Trump victory would mean uncertainty and volatility for the markets believes SocGen.
In that event, switch out of equities into bonds, hedge the dollar and buy the euro, Swiss franc, gold and Chinese onshore assets. Buy the pharma sector as well.
Globalization is 'over' says Deutsche - 11.45am
"The world has been on a “globalizing” trend since the end of World War II. But looking at this year, there is compelling evidence to argue that this is being reversed," says German bank.
"The number of temporary trade barriers put up last year is at the highest since records began and trade deals are at their lowest in more than two decades.
"Whatever the outcome of today's US election, it is hard to avoid the conclusion that globalization has peaked and most likely embarked on a reversal over the last few years."
London's small cap movers - 11.30am
In the world of the small caps, it’s been a decent morning of trading for Metal Tiger PLC (LON:MTR).
The stock is up more than 15% after it was revealed that former chief executive Paul Johnson has issued an early exercise notice for a portion of his outstanding options, which Metal Tiger called “a clear statement of his belief in the company’s business model”.
Aramdale Capital PLC (LON:ACP) also enjoyed a decent start to Tuesday, Shares in the explorer are up more than 8% after it recent assays confirmed high-grade graphite mineralisation at its Mahenge Liandu project in Tanzania.
The morning wasn’t so fruitful for Grafenia Plc (LON:GRA) which is down more than 15% after its interims disappointed investors.
CloudTag Inc (LON:CTAG) has also struggled and is down 25% so far today.
The wearable tech group has received a provisional purchase order from its European distributor for its first product, CloudTag Track, and added that it is in the process of raising just over £4mln from an institutional investor.
FTSE 100 stays steady - 10.45am
London’s FTSE 100 remains almost static, up only 10 points at 6,817.
City commentators sum up the Tuesday’s awkward pre-election trading.
Jasper Lawler, analyst at CMC Markets, has highlighted that Monday’s relief rally - inspired by the assumption the Hillary Clinton was now favourite after the conclusion of an FBI probe – had turned to “cautious unease” by Tuesday Morning in Europe.
“Whether the day finishes with the same quiet tone will depend on any election news including anything from polls to Trump gaffes to Clinton WikiLeaks emails,” he said in a note.
Investors are bracing for the possibility of election day volatility, Lawler added.
IG Market’s Joshua Mahony, effectively summed up the current anxiety in the financial markets.
“The reality has hit home today, after yesterday’s carefree exuberance almost made us believe the election was already over,” Mahony said.
“Today sees all other concerns thrown out the window as we hunker down for a historic night that will likely dictate market sentiment for the remainder of this year.”
He added: “Despite the widespread clues that we could see a Clinton victory, the hesitance seen within financial markets this morning are a clue that perhaps investors are becoming a little weary of relying too much on pollsters after the referendum result.”
FTSE 100 predictably unmoved, but Tuesday tells a tale of two very different retailers - 8:50am
As London’s FTSE 100 was predictably unmoved ahead of the US election, investor attentions can focus on two very different UK retailers.
Marks & Spencer Group Plc confirmed a gloomy trading performance and it plan to shut 60 clothing stores, meanwhile Primark owner Associated British Food Plc thanked its new store openings that allowed cumulative revenue growth outshine a drop in like-for-like sales.
In early deals Marks & Spencer shares were down 0.4% to 347.2p, as the Primark owner was up 5.7% to £26.34 per share.
Imperial Brands Plc (LON:IMB), a share recently bought up as takeover acitivity saw its tobacco rivals consolidate, was down 2.5% despite outperforming expectations for the 2016 financial year.
Nonetheless, the aforementioned expectations were low given profit warnings earlier this year and, indeed, a near 50% drop in annual profits wasn’t widely celebrated in Tuesday’s early deals.
Housebuilders Barratt Developments Plc (LON:BDEV) and Persimmon Plc (LON:PSN) were also notable fallers, losing just over 1% each, whilst banking stocks like Barclays Plc (LON:BARC), Royal Bank of Scotland Plc (LON:RBS) and HSBC Holdings Plc (LON:HSBA) were also among the fallers.
The FTSE 100 was just four points higher at 6,811.
FTSE 100 in wait-and-see mode - 6:55am
It is decision day at the polls in the USA and UK investors look set to be in wait-and-see mode today.
Spread betting quotes indicates that the FTSE 100 will open barely a couple of points up from last night’s close of 6,807.
US markets had a sparkling day yesterday as the chances of a Clinton victory in today’s election improved, after she was cleared of any wrong-doing by the Federal Bureau of Investigations, which had, once again, been checking into emails sent and received by her team.
It is not so much that the market is sold on the idea of a Clinton presidency, as the prospect of keeping Donald Trump out of the White House that sparked yesterday’s 2.1% gain on the Dow Jones average stateside.
The broader-based S&P 500 fared better still, advancing 2.2%, or 46 points, to 2,132, on what was the best day for US blue-chips since March.
US markets were playing catch-up, however, and having adjusted for the news about Clinton, global investors look like they could be reluctant to push on further.
Trading in Asia this morning was mixed, with the Nikkei 225 in Japan off 17 points at 17,165, while the Hang Seng index in Hong Kong was up 51 points at 22,852.
On the corporate front back in Blighty, a number of heavyweights are set to give trading updates, including fags maker Imperial Brands, Primark-owner Associated British Foods and insurance groups Direct Line and Jardine Lloyd Thompson, but it is probably Marks & Spencer’s interims that will garner the most interest.
It is rumoured that new boss Steve Rowe is going to acknowledge what has been evident for years now, and that is that M&S (LON:MKS) is a better grocer than it is clothes seller.
Rumours in the market suggest that Rowe intends to hitch the retailer's wagon more firmly to the foods side of the business.
Rowe is also said to be planning to shut a number of shops as he attempts to revive the fortunes of the slumbering giant of the High Street.
According to Sky News, M&S plans to close a substantial number of shops, albeit over several years.
Many shops that will remain open will have more space allocated to selling food, and less to selling clothes.
As with any significant restructuring, the changes will lead to a significant one-off charge, according to Sky's sources.
Around the markets
- Gold: US$1,283.60 an ounce, up US$4.20
- Oil: Brent crude is trading at US$48.81 a barrel, up 10 cents
- Pound: US$1.2404, up 0.07 cents
Headlines
- Santander returns with new bid for Williams & Glyn – The Times
- Elon Musk calls for universal income after robots take human jobs – The Independent
- BAE to benefit as UK and Australia win fighter-jet support work – Financial Times
- Channel 5 settles in to repeat profit – The Daily Telegraph
- £25 billion hole will limit Philip Hammond's options in autumn statement, says IFS – The Guardian
- Brexit boost for JCB as it seals £35mln digger deal with the U.K.'s largest plant hire firm – Daily Mail