London stocks were set to fall at the open on Wednesday as investors continue to eye the US mid-term elections.
The FTSE 100 was called to open down 22 points at 7,284.
CMC Markets analyst Michael Hewson said: “The FTSE 100 had a disappointing day underperforming due to a sharp slide in the oil price which weighed on the oil majors BP and Shell.
“The slide in the oil price appears to have been because of rising Covid infection rates in China which appears to be pricking the optimism around the reopening narrative that drove Brent crude prices up to $100 a barrel at the beginning of the week.
“US markets also had another good day, finishing higher for the 3rd day in a row, although well off the highs of the day with the gains being relatively modest, despite a fall in treasury yields with the markets trading relatively cautiously ahead of tomorrow’s CPI report. This pullback suggests we will see a lower European open this morning.”
As far as the US mid-terms are concerned, Danske Bank said that While votes are still being counted, exit polls suggest that republicans are the favourites to win control of the House of Representatives, while the Senate race is still too tight to call.
“At the time of writing, results received so far indicate that the Democratic Party has been able to flip one seat in senate in Pennsylvania. Focus remains on results for Georgia, Wisconsin and Nevada. Focus remains on results for Georgia, Wisconsin, Nevada and Pennsylvania.
“The race for the house has also turned out to be tighter than expected. It might take days or even weeks until the final results are confirmed especially for the Senate. In Georgia, the final senate result could require a run-off election at a later date if neither Democratic nor Republican candidate manages to secure at least 50% of votes (as was the case in 2020).”
In UK corporate news, food and clothing retailer Marks & Spencer said it expected to deliver annual results “similar” to expectations as interim pre-tax profits rose 11.3%.
Clothing and homewares sales rose 14% in the six months to October 1, while food revenue was up 5.6%. Group revenue increased 8.5% to £5.5bn.
Engineering company Smiths said that first-quarter growth had accelerated as it delivered a full-year performance ahead of expectations.
Smiths said revenues had slipped 1.8% year-on-year to £1.08bn, while pre-tax profits ticked up 0.6% to £31.1m. Earnings per share were flat at 10.8p each.
