Europe takes hit on UK and France election nerves

(Alliance News) - Stock prices in London closed lower on Tuesday, with France's polarising election at the forefront of investor anxieties.

Looking ahead to the rest of the week, focus is on US data, with a gross domestic product reading Thursday and the latest personal consumption expenditures data on Friday.

The FTSE 100 index closed down 33.76 points, 0.4%, at 8,247.79. The FTSE 250 ended down 199.14 points, 1.0%, at 20,363.43, and the AIM All-Share closed down 3.83 points, 0.5%, at 768.03.

The Cboe UK 100 ended down 0.6% at 820.55, the Cboe UK 250 closed down 1.0% at 17,744.78, and the Cboe Small Companies ended down 0.2% at 16,863.70.

In European equities on Tuesday, the CAC 40 in Paris ended down 0.6%, while the DAX 40 in Frankfurt ended down 0.9%.

French politics remained in focus. President Emmanuel Macron came under strong criticism on Tuesday for warning a far-right or hard-left win in snap polls could spark a "civil war", with his opponents urging him not to scare the public.

France is preparing to vote on Sunday in the country's most polarising ballot in decades. Macron called the parliamentary polls after the far-right National Rally scored a runaway victory in European Parliament elections earlier this month.

Ahead of the election, on Wednesday, there is unemployment and consumer confidence data for France.

In the UK, it is the final full week of campaigning before the July 4 general election.

Amid campaigning, the Conservative party has withdrawn support from candidates Craig Williams and Laura Saunders after they were implicated in the General Election betting row.

Prime Minister Rishi Sunak acted after coming under mounting pressure within the party to take a tougher stance on the alleged use of inside information to bet on the timing of the July 4 poll.

Stocks in New York were mixed at the London equities close, with the DJIA down 0.7%, the S&P 500 index up 0.3%, and the Nasdaq Composite up 1.1%.

Away from politics, US data will be in focus this week, with a gross domestic product reading on Thursday and the latest personal consumption expenditures data on Friday.

The pound was quoted at USD1.2676 at the London equities close Tuesday, lower compared to USD1.2691 at the close on Monday.

The euro stood at USD1.0705 at the European equities close Tuesday, down against USD1.0728 at the same time on Monday.

Against the yen, the dollar was trading at JPY159.73, slightly higher compared to JPY159.69 late Monday.

In the FTSE 100, Admiral rose 2.2% to the top of the index. Direct Line lost 0.4%.

Berenberg raised Admiral to 'buy' on Tuesday, believing the insurer to be a "wonderful company at a fair price", though it cut Direct Line, seeing few positive catalysts ahead.

In other news, DS Smith and International Paper have cleared a regulatory hurdle on the way to their proposed combination.

London-based packing company DS Smith agreed an all-share takeover by its Memphis, Tennessee-based rival in April, which would leave its shareholders with 33.7% of the combined group and values each DS Smith share at 415 pence.

On Tuesday, DS Smith and International Paper announced that the waiting period under the Hart-Scott-Rodino Act has expired.

"This is an important step in the consummation of the proposed combination as the expiration removes the HSR Act's bar to closing," the companies explained.

DS Smith closed up 1.4%. International Paper was down 1.0% in New York.

On the other hand, London-listed jet engine maker Rolls-Royce and aerospace firm Melrose traded lower. The duo were down 1.1% and 2.4%, respectively.

The shares took a hit, after Airbus lowered its outlook. Tumbling in Paris, Airbus closed down 9.4%.

In the FTSE 250, Carnival rose 9.4%, after second quarter results beat guidance on "every measure".

In the three months to May 31, Carnival reported net income of USD92 million, swinging from a USD407 million loss a year prior. Revenue rose 18% to USD5.78 billion from USD4.91 billion.

Adjusted net income of USD134 million, or USD0.11 per share, outperformed March guidance by nearly USD170 million, driven by higher ticket prices, higher onboard spending and the timing of expenses between quarters, Carnival said.

"Off the back of that effort, we closed yet another quarter delivering records, this time across revenues, operating income, customer deposits and booking levels, exceeding our guidance on every measure," commented Chief Executive Officer Josh Weinstein.

On London's AIM, SIMEC Atlantis Energy shares more than doubled.

In 2023, SIMEC Atlantis swung to a GBP22.8 million pretax profit from a GBP11.1 million pretax loss the previous year. Revenue multiplied to GBP15.3 million from GBP3.9 million.

Chair Duncan Black commented: "We have the funding and visibility on future revenues we need to be able to deliver our development projects and service our debt. We have a pipeline of projects that would be the envy of many much larger companies."

Brent oil was quoted at USD85.05 a barrel at the London equities close Tuesday, virtually unchanged compared to USD85.07 late Monday.

Gold was quoted at USD2,324.50 an ounce at the London equities close Tuesday, lower against USD2,331.10 at the close on Monday.

In Wednesday's UK corporate calendar, there are full year results from AO World and Revolution Beauty.

The economic calendar for Wednesday has a German consumer confidence reading.

There is also US building permits and new home sales data.

By Sophie Rose, Alliance News senior reporter

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