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Markets play waiting game ahead of denouement in White House race

Published 08/11/2016

The identity of the next US president will shortly be revealed
The identity of the next US president will shortly be revealed

London's top-flight index paused for breath as European markets braced for the result of a fractious and hard-fought US presidential election.

The FTSE 100 index was up 36.23 points to 6,843.13 after a remarkable rally in the previous session when the market surged by 113 points.

Across Europe, Germany's Dax was 0.2% higher and the Cac 40 in France was up 0.3%.

European markets were in a buoyant mood on Monday after Democratic nominee Hillary Clinton was given the all-clear by the FBI over her handling of classified information.

Republican candidate Donald Trump had been closing the gap on Mrs Clinton after the FBI said it was investigating a fresh batch of emails that raised questions over her handling of classified information while serving as US secretary of state.

On the currency markets, the pound was down 0.1% against the US dollar and the euro at 1.238 and 1.121 respectively.

Sterling fell around 1% against the greenback on Monday after the US dollar strengthened when the FBI said it would not press charges over a new collection of emails linked to Mrs Clinton's use of a private server.

Nigel Green, chief executive of deVere Group, warned that a triumph for Mr Trump could deliver a "double whammy negative impact" on global markets because they have priced in a victory for Mrs Clinton.

"Should she win, global financial markets will react favourably as she is seen to represent the status quo, whereas Trump is much more of an unknown and therefore will create uncertainty and the markets will react accordingly.

"However, 2016 has been a year full of surprises. Don't forget the markets priced in a Remain win in the Brexit referendum and got it wrong; indeed the pound was being traded at 1.5 against the US dollar on the day of the vote."

Oil prices were feeling the impact of the race to the White House, with Brent crude at a standstill ahead of the result on Wednesday.

The price of oil slipped 0.1% to 46.12 US dollars a barrel.

In UK stocks, shares in Marks & Spencer took a hammering after it revealed plans to axe 30 UK stores and slash shop space devoted to its ailing clothing ranges as it focuses more on food.

Shares were off more than 5% or 18p to 331p as half-year profits crashed 88.4% to £25.1 million, partly due to higher pension costs, while earnings fell 18.6% to £231.3 million on an underlying basis.

Like-for-like sales in the division fell by 5.9% in the six months to October 1.

In a contrast of fortunes, Primark-owner Associated British Foods was the biggest riser on the London market after saying it should benefit from Brexit, as it predicted rising profits despite a squeeze on its budget fashion chain from the plunging pound.

Shares were up just shy of 6%, or 144p to 2,633p, as it posted a 5% rise in underlying pre-tax profits to £1.07 billion for the year to September 17 and said it expected another hike in earnings for the coming year.

The biggest risers on the FTSE 100 Index were Associated British Foods up 144p to 2,633p, BHP Billiton up 57.5p to 1,279p, Antofagasta up 24p to 589p, Mediclinic International up 25p to 932p.

The biggest fallers on the FTSE 100 Index were Marks & Spencer down 18p to 331p, Imperial Brands down 114p to 3,689p, Barratt Developments down 7.5p to 454.5p, Persimmon down 25p to 1,663p.

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