The FTSE 100 bucked the European trend and slipped into the red along with US stocks as investors weighed up the path of the coronavirus pandemic, company earnings, and geopolitics.
London’s main stock index rose in morning trading. But a sharp climb in sterling set the index back in the afternoon.
It was last down 0.4 per cent at 5,944 points. The mid-cap FTSE 250 was up 0.4 per cent, however.
The US’s S&P 500 was down 0.1 per cent in the early session as Wall Street investors analysed bank earnings. The Dow Jones was flat and the Nasdaq was down 0.2 per cent.
After a choppy day’s trading Germany’s Dax was up 0.1 per cent as it headed towards the close. The continent-wide Stoxx 600 was only slightly higher.
FTSE 100 held down by jump in the pound
The pound jumped after reports said the UK government planned to continue trade negotiations with the EU past its self-imposed deadline.
It rose 0.9 per cent to $1.305 in afternoon trading. Sterling also climbed 0.8 per cent against the euro to €1.109.
“Upping hopes that a deal will eventually be reached, the pound saw a serious swing in the aftermath of the reports,” said Connor Campbell, market analyst at Spreadex.
“For investors it also perhaps removes an element of volatility going into what could be a very choppy period.” He cited “increased covid-19 restrictions and the looming US election” as potential sources of danger.
However, sterling’s rise held back the FTSE 100. A higher pound makes the overseas earnings of the index’ multinational companies worth less in relative terms.
Major multinationals were the biggest fallers. Standard Chartered was four per cent lower and jet engine-maker Rolls Royce was down 2.2 per cent.
Astrazeneca had fallen 2.7 per cent while HSBC was 2.3 per cent lower. Luxury brand Burberry was down 1.6 per cent.
US stocks rise as investors parse results
On Wall Street, stocks opened higher but then slipped as investors parsed the latest set of bank quarterly earnings.
Goldman Sachs shares were only slightly higher despite it nearly doubling its profit in the third quarter year on year. Its results were helped by a surge in trading revenue and increased mergers and acquisitions.
Bank of America and Wells Fargo fared less well, however, reporting a slump in profit. Investors are worried about the loan losses the lenders could face.
Markets were hit by fading hopes of another stimulus deal before the 3 November presidential election. Halts in vaccine trials by US firms also limited optimism.