London close: Stocks higher as Americans head to the midterm polls

(Sharecast News) - London stocks managed to close just above the waterline on Tuesday as investors turned their attention to the US midterm elections, after solid updates from the likes of Coca-Cola HBC and AB Foods helped to offset a gloomy statement from Persimmon earlier. The FTSE 100 ended the session up 0.08% at 7,306.14, and the FTSE 250 was ahead 0.75% at 18,697.89.

Sterling was in a mixed state, and was last trading 0.65% stronger on the dollar at $1.1589, while it weakened 0.03% against the euro to change hands at €1.1486.

"European markets have continued to trade cautiously, with the weaker US dollar appearing to help to give sentiment a lift, as voting begins in the US midterm elections," said CMC Markets chief market analyst Michael Hewson.

"The FTSE 100 has once again been the laggard, with BP and Shell acting as the main drag on the index, with all other sectors predominantly positive."

In economic news, grocery inflation soared to a fresh record of nearly 15% in fresh industry data, adding hundreds of pounds to annual shopping bills.

According to Kantar, grocery price inflation in the four weeks to 30 October reached 14.7% - the highest rate since the retail consultancy started tracking prices in 2008.

In the 12 weeks to 30 October, inflation was 13.4%, with prices rising fastest in markets such as margarine, milk and dog food.

"Consumers face a £682 jump in their annual grocery bill if they continue to buy the same items, and just over a quarter of all households - 27% - now say they're struggling financially, double the proportion we recorded last November," said Fraser McKevitt, head of retail and consumer insight at Kantar.

Overall, take home grocery sales rose by 5.2% in the 12 weeks to 30 October, with own label sales ahead 10.3% as hard-pressed shoppers sought cheaper alternatives.

"Food and drink spending is generally non-discretionary, so it's not easy for shoppers to cut back the amount they buy," McKevitt added.

"Many are looking to reduce costs in other ways, and the big shift to own label is still accelerating.

"While some of the rise will be down to price inflation, we can clearly see the trend in sales of the very cheapest value own label ranges, which are up by a whopping 42%."

Separate research showed that retail sales growth slowed in October as the mounting cost-of-living crisis curbed spending.

According to the latest BRC-KPMG retail sales monitor, total sales rose by 1.6% in October, compared to a rise of 2.2% in September.

The figure was below both the three-month average of 1.7% and 12-month average of 2.7%.

On the continent, eurozone retail sales nudged higher in September according to official data, in line with expectations.

Eurostat reported that the seasonally-adjusted volume of retail trade increased by 0.4% in both the eurozone and the wider European Union in September, matching consensus.

Non-food products and food, drinks and tobacco led the increase, rising 1.0% and 0.4% respectively, while automotive fuels fell by 0.6%.

Year-on-year, the calendar-adjusted retail sales index fell by 0.6% in the eurozone, compared to a 1.4% decline in August, which was well above consensus for a 1.3% fall.

Across the EU, year-on-year retail sales fell by 0.3% in September.

"Real consumer spending on goods was hit by rising prices in the third quarter," said Melanie Debono, senior Europe economist at Pantheon Macroeconomics.

"This trend will continue in the fourth quarter, despite a likely fall in inflation.

"Looking ahead, with consumer confidence still in the doldrums and prices for most goods and services still rising, retail sales are more likely to fall again than rise in the fourth quarter."

Across the pond, small business optimism fell to a three-month low in the US October, according to the National Federation of Independent Business.

The NFIB's small business optimism index fell to 91.3 in October, down 92.1 in September, as 33% of owners stated inflation was their primary concern when it came to operating businesses - up three points from the previous month to make up the highest percentage since the fourth quarter of 1979.

Elsewhere, the number of US business owners who said they intend to increase employment over the next three months fell to 20%, and 50% of the survey's participants stated they had raised their average selling prices as part of an effort to battle inflation.

"Owners continue to show a dismal view about future sales growth and business conditions," said NFIB chief economist Bill Dunkelberg.

On London's equity markets, housebuilders were in the red after Persimmon warned of fewer completions and a hit to margins from falling house prices amid the cost-of-living crisis.

The company said cancellation rates had risen to 28% from 21% in the last six weeks after the government's disastrous mini budget - which saw thousands of mortgage offers pulled from the market - and rising interest rates.

Persimmon slumped 5.22%, Taylor Wimpey lost 0.54%, Berkeley Group was off 0.89%, Vistry Group slid 2.58%, and Bellway was 1.22% weaker.

Elsewhere, Hilton Foods Group tumbled 15.14% after it warned its full-year profits would be below its expectations, due to challenges in the UK seafood business and the wider macroeconomic environment.

Direct Line Insurance fell 3.11% after it posted a decline in gross written premiums, pointing to a challenging market backdrop for the motor and home segments.

Its peers also retreated, with Admiral Group closing 2.77% lower.

Sales, marketing and support services group DCC slid 8.23% even after it posted a rise in first-half profit and revenue.

On the upside, Associated British Foods gained 2.07% 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.

Retailers in general got a boost as well, with B&M European Value Retail up 4.4% and Frasers Group ahead 4.39%.

Soft drinks bottler Coca-Cola HBC rallied 2.52% after it raised full-year earnings guidance as it reported a boost to revenue from rising prices in the third quarter.

Luxury sports car maker Aston Martin Lagonda rose 5.04% after reports that Canadian billionaire Lawrence Stroll had led a £30m investment in the company.

Stroll's Yew Tree investment vehicle now owns 23.3% of the company after he added a 4.25% stake, the Telegraph reported.

Elsewhere, Hammerson pushed 4.75% higher after a well-received third-quarter trading update, while Babcock International was boosted 4.01% by an initiation at 'buy' by Berenberg.

Reporting by Josh White for Sharecast.com. Additional reporting by Michele Maatouk, Frank Prenesti, Abigail Townsend and Iain Gilbert.

Market Movers

FTSE 100 (UKX) 7,306.14 0.08% FTSE 250 (MCX) 18,697.89 0.75% techMARK (TASX) 4,314.48 0.67%

FTSE 100 - Risers

B&M European Value Retail S.A. (DI) (BME) 372.70p 4.40% Frasers Group (FRAS) 737.00p 4.39% Endeavour Mining (EDV) 1,650.00p 4.36% Ocado Group (OCDO) 703.60p 4.36% Fresnillo (FRES) 805.40p 4.06% JD Sports Fashion (JD.) 107.90p 3.35% Schroders (SDR) 418.30p 3.13% Spirax-Sarco Engineering (SPX) 11,240.00p 2.97% Anglo American (AAL) 3,064.00p 2.89% Experian (EXPN) 2,770.00p 2.86%

FTSE 100 - Fallers

DCC (CDI) (DCC) 4,537.00p -8.23% Persimmon (PSN) 1,254.00p -5.22% Harbour Energy (HBR) 389.00p -4.47% BP (BP.) 485.70p -3.21% Admiral Group (ADM) 1,929.50p -2.77% Shell (SHEL) 2,438.00p -2.52% Glencore (GLEN) 524.70p -1.37% RS Group (RS1) 882.00p -1.23% Berkeley Group Holdings (The) (BKG) 3,548.00p -0.89% Pershing Square Holdings Ltd NPV (PSH) 2,880.00p -0.86%

FTSE 250 - Risers

Elementis (ELM) 105.00p 8.81% Ferrexpo (FXPO) 123.70p 7.94% Wizz Air Holdings (WIZZ) 2,120.00p 6.85% International Distributions Services (IDS) 229.30p 6.01% Aston Martin Lagonda Global Holdings (AML) 140.65p 5.04% Moonpig Group (MOON) 149.60p 4.91% ASOS (ASC) 678.50p 4.87% Hammerson (HMSO) 22.50p 4.75% Liontrust Asset Management (LIO) 998.00p 4.72% Currys (CURY) 71.50p 4.61%

FTSE 250 - Fallers

Hilton Food Group (HFG) 538.00p -15.14% Tullow Oil (TLW) 46.92p -4.09% W.A.G Payment Solutions (WPS) 78.70p -3.44% Direct Line Insurance Group (DLG) 193.20p -3.11% Energean (ENOG) 1,527.00p -2.68% Vistry Group (VTY) 605.00p -2.58% Bank of Georgia Group (BGEO) 2,400.00p -2.44% Syncona Limited NPV (SYNC) 179.80p -2.28% TP Icap Group (TCAP) 173.20p -1.98% Great Portland Estates (GPE) 532.00p -1.94%