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London open: FTSE edges down as investors mull events in France, South Korea
London stocks edged lower in early trade on Wednesday following mixed performances in the US and Asia, as investors mulled events in France and South Korea.
At 0830 GMT, the FTSE 100 was down 0.2% at 8,341.89.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “Political risk has been put back on the agenda after South Korea was plunged into chaos by the declaration, then subsequent lifting of martial law.
“Deep uncertainty looms for France too. The looming vote of no-confidence in the minority government of Michel Barnier threatens fresh political upheaval in a key EU member state. The internationally focused FTSE 100 has opened flat, with optimism washing around Wall Street offsetting concerns about political instability in Asia and Europe.
“Friday’s key monthly jobs report is being eyed amid hopes it may show a US labour market which is buoyant but not hot enough to derail a gradual easing of interest rates in the world’s largest economy.”
On the UK macro front, the S&P Global services PMI for November is due out at 0930 GMT. Investors will also be eyeing the US ADP report at 1315 GMT and the ISM services PMI at 1500 GMT.
In equity markets, Legal & General jumped to the top of the FTSE 100 as it maintained profit guidance for the full year and hinted at more returns for shareholders than previously announced.
The company said it expects to return to shareholders a proportion of the capital not deployed on strain this year which “would be incremental to the capital return intentions indicated at the capital markets event in June”.
Coca-Cola HBC shot higher after an upgrade to ‘outperform’ at BNPP Exane, while Victrex was the biggest riser on the FTSE 250 after an upgrade to ‘buy’ at Jefferies.
Rio Tinto was a little weaker as it forecast higher consolidated mined copper production for the 2025 financial year driven by higher output from its Oyu Tolgoi operation in Mongolia and also faced calls from hedge fund Palliser to scrap its dual listing structure.
Rio also said it was selling a 30% stake in its Winu copper-gold project in Australia to Japan’s Sumitomo Metal Mining Co. for $399m.
Zigup slumped as it posted a drop in interim profit and revenue, while Me Group dropped even as it reported continued growth in the second half and said it expects FY 2024 to be another year of record profitability.
Bunzl was knocked lower by a downgrade to ‘hold’ at HSBC.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Legal & General Group Plc | +3.86% | +8.60 | 231.50 |
| 2 |  |
Banco Santander S.a. | +3.19% | +11.50 | 371.50 |
| 3 |  |
International Consolidated Airlines Group S.a. | +2.87% | +7.60 | 272.00 |
| 4 |  |
Jd Sports Fashion Plc | +2.09% | +2.15 | 105.05 |
| 5 |  |
Spirax Group Plc | +2.03% | +150.00 | 7,530.00 |
| 6 |  |
Ferguson Enterprises Inc. | +1.58% | +270.00 | 17,360.00 |
| 7 |  |
Coca-cola Hbc Ag | +1.35% | +38.00 | 2,856.00 |
| 8 |  |
Wheaton Precious Metals Corp. | +1.21% | +60.00 | 5,000.00 |
| 9 |  |
Flutter Entertainment Plc | +1.17% | +260.00 | 22,390.00 |
| 10 |  |
Standard Chartered Plc | +1.06% | +10.20 | 976.00 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Astrazeneca Plc | -2.15% | -232.00 | 10,558.00 |
| 2 |  |
Admiral Group Plc | -1.18% | -31.00 | 2,589.00 |
| 3 |  |
Antofagasta Plc | -1.17% | -20.50 | 1,731.50 |
| 4 |  |
Bhp Group Limited | -1.14% | -24.00 | 2,082.00 |
| 5 |  |
Anglo American Plc | -1.07% | -27.50 | 2,543.50 |
| 6 |  |
Severn Trent Plc | -0.99% | -27.00 | 2,700.00 |
| 7 |  |
Coca-cola Europacific Partners Plc | -0.96% | -60.00 | 6,160.00 |
| 8 |  |
Unilever Plc | -0.96% | -45.00 | 4,649.00 |
| 9 |  |
Rio Tinto Plc | -0.89% | -44.50 | 4,975.50 |
| 10 |  |
Gsk Plc | -0.84% | -11.50 | 1,356.50 |
US close: Stocks rangebound but S&P 500, Nasdaq hit fresh highs
US stocks finished mixed again on Tuesday with markets rangebound amid global geopolitical uncertainty and a surge in oil prices – though the S&P 500 and Nasdaq still managed to close at record highs.
The S&P 500 edged 0.05% higher to a new peak of 6,049.88, while the Nasdaq gained 0.4% to a fresh high of 19,480.91. However, the Dow fell for the second straight day after hitting a record on Friday, slipping 0.2% to 44,705.28.
Oil prices, which were already higher ahead of this week’s OPEC+ meeting, jumped in afternoon trade after South Korea’s president Yoon Suk Yeol declared emergency martial law, arguing that it was needed to defend the country from communists in North Korea. West Texas Intermediate crude was up 2.8% at $69.97 a barrel.
“South Korea’s sudden political instability led to an around 2% rise in the oil price due to supply concerns as traders were already buying the black gold ahead of this week’s OPEC+ meeting at which continued output cuts are expected to be announced,” said IG senior technical analyst Axel Rudolph.
President Yoon later backed down and lifted the martial law with the withdrawal of the military from government buildings after MPs voted to block the move.
Back on home soil, US job openings rose to 7.74m in October, according to the Bureau of Labor Statistics, up from a downwardly revised 7.37m in September and above market expectations for a reading of 7.48m. Meanwhile, the number of hires and total separations was little changed at 5.3m, with quits at 3.3m and layoffs and discharges at 1.6m.
Market movers
Stocks with heavy exposure to South Korea fell, including ADS shares of Korea Electric Power, ecommerce group Coupang, steel maker Posco and telecoms firm KT Corporation.
US Steel tanked after Donald Trump said he would move to prevent Nippon Steel taking over the American manufacturer.
AT&T rose strongly after announcing plans to distribute $40bn to shareholders over the next three years as it pursues targets to expand America’s largest fibre network to 50m total locations by 2029.
Microsoft finished flat after the news that it is facing a £1bn antitrust lawsuit in the UK regarding how its cloud customers are charged.
Shares in AI server business Super Micro Computer traded higher on the back of news that a special committee had found “no evidence of misconduct” at the firm.
Wednesday newspaper round-up: British Steel, nuclear power plants, South Western Railway
Ministers are considering renationalising British Steel in a last-ditch attempt to save thousands of jobs, amid a standoff between the government and the company’s Chinese owners over a £1bn investment. Jonathan Reynolds, the business secretary, is locked in talks with British Steel and its owner, Jingye, to agree how much each party should put into a rescue plan for its main Scunthorpe site. – Guardian
Four of Britain’s oldest nuclear power plants will continue running for more than a decade longer than initially planned to help bridge a gap before the delayed Hinkley Point nuclear station starts up. The owner of Britain’s nuclear plants, the French energy company EDF, said it had agreed to extend the lifetime of its reactors yet again to “boost energy security and reduce dependence on imported gas”. – Guardian
Labour will take South Western Railway under public control next spring, marking the first step in Sir Keir Starmer’s sweeping plan to reverse 30 years of privatisation. It is understood that the London commuter service will be seized once South Western’s contract expires next May. The Government is set to confirm the plan as soon as Wednesday. – Telegraph
A Commons committee has warned that the two-year delay in reforming the UK’s official labour market statistics is a “major blow” that could lead the Bank of England and the government into making “misinformed” decisions about the economy. Dame Meg Hillier, chair of the Treasury select committee, said that the delay would rob policymakers of reliable data about the jobs market making “some of the most consequential decisions taken by the Treasury and Bank of England challenging at best and misinformed at worst”. – The Times
The co-founder and chief executive of Revolut has said it is “not rational” to float its shares in the UK over the US, further reducing the prospect of the new government convincing the valuable start-up to list in London. Nik Storonsky, 40, said “sooner or later” the London-based fintech company will want to consider floating on the public market to return money to shareholders, but he said share stamp duty and less liquidity reduced the appeal of London as a listing destination. – The Times
