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London open: Stocks edge higher following US election debate
London stocks edged higher on Tuesday as investors digested the outcome of the first US presidential debate, with Hillary Clinton seen to have come out on top versus her rival Donald Trump according to currency and gold markets.
As of 0820 BST the FTSE 100 was higher by 18.96 points to 6,862.
The US dollar was falling 2.18% to 19.44 versus the Mexican peso, perhaps the currency which stood to lose the most from an election victory by the US Republican presidential candidate, according to analysts.
Similarly, gold futures for December delivery on COMEX were down by 0.39% to $1,339.10/oz. In parallel, dollar/yen, another proxy for investors´ level of risk aversion was up by 0.22% to 100.55.
More significantly, a widely-cited CNN/ORC poll said 62% of viewers believed Clinton had won the debate, versus the 27% who said Trump had come out on top.
Against that backdrop, European banks were seeing a small bounce following the previous session’s thrashing, with stock in Deutsche Bank rising 1.73% to €10.72.
CMC Markets’ Michael Hewson said: “Last night’s debate was the first opportunity to see the two candidates go head to head and judging by some of the market reaction Donald Trump would appear to have come off second best, which means that we could well see European markets open higher after yesterday’s sharp sell-off. Certainly his comments about not paying his taxes are unlikely to go down particularly well with either side, though it is equally true that with these debates we find out little that we didn’t already know about either candidate.”
On the data front, the UK’s CBI distributive trades survey is at 1100 BST, with the latest euro area M3 money supply data scheduled for release at 0900.
Stateside, investors were waiting on the S&P Case Shiller home price data for the month of July and the Conference Board’s consumer confidence gauge for September.
In corporate news, Wolseley‘s shares were lower, perhaps due to a lack of capital return, while currency tailwinds boosted full-year revenues as the plumbers merchant announced the result of the strategic review for its UK operations. Total revenues for 2016 jumped 8.5% to reach £14.43bn or by 4.2% in constant currency terms. Sales growth in like-for-like terms came in at 2.4%. That drove a 43% rise in profits before tax to £727m. The company’s full-year payout was raised 10.2% to 100p.
Legal & General said its retirement arm was on track to double its new business sales in the full year, with customer demand unaffected by the introduction of Solvency II regulation, Brexit uncertainty or lower interest rates. The FTSE 100 group said revenues from the division would be around £5.4bn, up from £2.9bn last year.
United Utilities said on Tuesday that it expects revenue for the first half of this year to be slightly lower than the same period last year, reflecting the accounting impact of its Water Plus business retail joint venture, partly offset by its allowed regulatory revenue changes. However, underlying operating profit for the first half is expected to be marginally higher.
