(Alliance News) - The FTSE 100 was outperforming European peers on Wednesday amid creeping fear that soaring Covid infections could lead to widespread lockdowns on the continent during the busiest consumer spending period of the year.
The FTSE 100 was up 8.01 points, or 0.1%, at 7,274.70 midday Wednesday. The mid-cap FTSE 250 index was down 93.43 points, or 0.4%, at 7,274.70. The AIM All-Share index was down 6.00 points, or 0.5%, at 1,200.74.
The Cboe UK 100 index was flat at 721.12. The Cboe 250 was down 0.7% at 20,599.19, and the Cboe Small Companies was down 0.4% at 15,227.64.
In mainland Europe, the CAC 40 in Paris was down 0.3%, while the DAX 40 in Frankfurt was down 0.6%.
The three parties set to make up Germany's next government - the Social Democrats, Greens and Free Democrats - are presenting their coalition agreement on Wednesday, as political power in the country shifts to the left. About eight weeks after national elections, the "marriage contract" will be made public at a joint press conference held by all three parties.
The Social Democrat finance minister and deputy chancellor, Olaf Scholz, is expected to succeed Angela Merkel as chancellor.
The biggest drag in London were travel stocks, with airlines taking a hit on potential travel slowdowns.
British Airways owner IAG fell 1.8%, easyJet 2.5%, Ryanair 2.3%, and Wizz Air 1.2%.
"There are now concerns that surging infections and lockdowns will depress the confidence of the travelling public. Ryanair boss Michael O'Leary has warned of a fraught period, with passengers deterred by this dramatic wave of infections from making bookings. Adding to the fragility are warnings from a parliamentary committee that new swathes of red tape could tie up journeys from the UK to Europe next year due to new border management systems coming into force," said Susannah Streeter, senior investment analyst at Hargreaves Lansdown.
Rolls Royce lost 2.3%, as it is sensitive to the fortunes of its airline customers.
Tying an even bigger anchor to the FTSE 100, Entain and Flutter Entertainment shed 4.2% and 2.5%, respectively, following more than 160 UK members of Parliament and peers wiring a letter to the Telegraph newspaper demanding "bold" government reforms to curb gambling.
Specifically, the group of MPs are keen to see measures put in place measures to curb the scale of betting. They want online limits brought in line with those in force in high streets, with gambling firms that failed to meet them or police them adequately at risk of losing their licences.
The maximum bet would be GBP2, tied to a spending limit of GBP100 a month, after which companies would have to apply strict affordability tests to the gambler to ensure they did not spend beyond their means.
In brighter company news for the market, Intertek was 6.6% higher as the quality assurance provider said it has made "strong progress" so far in the second half of 2021.
Revenue rose by 4.8% in July and August, picking up to 8.5% in September and October. Like-for-like revenue growth in July to October was 5.0%, or 6.2% when adjusted for trading days. Intertek said it is on track for "robust LFL revenue growth" in 2021.
"The supply chain disruption being experienced by corporations across multiple industries has made the need for comprehensive risk-based quality, safety and sustainability assurance more critical than ever. Companies are investing in quality assurance to build greater resilience and safety, whilst innovating to deliver new high-quality products and services as consumer expectations rapidly evolve," Chief Executive Andre Lacroix explained.
Among London mid-caps, Genus slumped 15% after the firm reported difficulties in the Chinese pig market.
Genus, which sells products made using biotechnology to cattle and pig farmers, said the volumes from its Pig Improvement Co business in China were lower in the four months to October 31 compared to a year before, due to a downturn in the market and significant volatility.
With live pig prices in China halving in early October before partially recovering, producers have been unprofitable and therefore have reduced their herds by postponing stocking orders. "We anticipate this inventory will need to be replaced when the market recovers," Genus said, more positively.
In the meantime, Genus said full-year pretax profit for financial 2022 will be "moderately lower" than its previous expectation. Genus posted a pretax profit for financial year 2021 of GBP55.8 million.
On AIM, IQE was down in the dumps, sinking 22%, with shares dropping to 12-month low, as a trading update showed sales and profits will undershoot management's prior forecasts by 8% and 17%, adjusting for currency movement.
The semiconductor company now expects full-year reported revenue to be in the region of GBP152 million, with adjusted earnings before interest, taxes, depreciation, and amortization about GBP18 million.
Interim Chief Executive Phil Smith says: "Whilst it is disappointing that 5G infrastructure deployments have remained weak all year, we still expect this macro trend to provide a multi-year growth cycle for IQE. In the immediate term, broader semiconductor market shortages have softened demand in some supply chains but we believe these effects to be temporary and remain excited by the opportunities ahead."
Wall Street futures were pointed to open lower on Wednesday, indicating a downbeat session before the Thanksgiving holiday on Thursday.
The Dow Jones was called down 0.4%, with the S&P 500 and the tech-heavy Nasdaq Composite both seen down 0.3%. The indices were mixed on Tuesday.
Brent oil was trading at USD82.11 a barrel, up from USD81.49 late Tuesday in London, but slipping from intraday highs of USD82.94.
XTB market analyst Walid Koudmani said: "Oil prices have returned to their recent range despite the announcement from President Biden that the US would be releasing some of its strategic petroleum reserves, a move which was meant to cool oil prices."
Sterling was quoted at USD1.3365 midday Wednesday, flat on USD1.3363 at the London equities close on Tuesday. The euro traded at USD1.1218 midday Wednesday, lower than USD1.1262 late Tuesday.
Against the yen, the dollar was firm at JPY115.01 versus JPY114.96 late Tuesday in London.
Gold was quoted at USD1,788.00 an ounce midday Wednesday, higher than USD1,784.01 on Tuesday.
Still to come on Wednesday, there is a mountain of US data due. US initial jobless claims, usually out on Thursdays, are due at 1330 GMT on Wednesday with the US government shut on Thursday for Thanksgiving. US durable goods orders and gross domestic product also are due at 1330 GMT.
At 1500 GMT, there is core personal consumption expenditure and new home sales. At 1900 GMT are the latest Federal Reserve minutes.
Wall Street is closed on Thursday, reopening for a half-day on Friday.
By Paul McGowan; paulmcgowan@alliancenews.com
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