European shares swung into the black on Tuesday as attention turned towards the crucial US mid-term elections which could see the right-wing Republican Party take control of the House of Representatives, while UK house builders fell on the back of a gloomy outlook from Persimmon.
The pan-European Stoxx 600 index was up 0.28% at 1150 GMT. All major bourses were lower, with Britain’s FTSE 100 flat.
“Millions of Americans will vote in the midterm elections today with expectations that the Republicans could win back the House, making it more difficult for President Biden to pass legislation,” said Interactive Investor head of investment Victoria Scholar.
“The dollar is strengthening across most major currencies including the pound and the euro. If the Republicans make strides in the election, that could make it harder to Biden to carry out fiscal stimulus measures, requiring less aggressive interest rate hikes from the Fed, in turn potentially dampening demand for the greenback.”
In equity news, Persimmon shares fell as the home builder reported a sharp rise in cancellation rates as demand slowed amid an increase in the cost of mortgages. Rivals Vistry, Bellway, Taylor Wimpey and Barratt were all lower on the news.
Shares in Danish jewellery maker Pandora were higher after upbeat earnings figures as were those in US-German biotech firm Qiagen.
Soft drink bottler Coca-Cola HBC was up after lifting annual earnings guidance. Primark owner AB Foods was also up as the clothing retail unit help to lift earnings and IMI gained after raising profit guidance, driven by a strong third quarter.
Insurer Direct Line fell as it posted a decline in gross written premiums, pointing to a challenging market backdrop for the motor and home segments. Admiral also retreated.
On the upside, Associated British Foods gained after it reported a jump in full-year sales and profits despite surging input cost inflation, following a bumper performance at its budget fashion brand Primark.
Reporting by Frank Prenesti for Sharescast.com
