FTSE 100 and CAC 40 race higher to erase losses

The UK’s blue-chip index FTSE 100 Index and its French counterpart CAC 40 both raced higher in the afternoon to erase this morning’s losses on the increased hopes that an agreement over a new stimulus bill in the United States could be reached. 

Still, some analysts are pessimistic that the agreed deal will be passed through the Senate before November 03.

FTSE: Real estate sector in trouble

FTSE 100 index trades at 5775 or 0.15% in the green after printing a 4-month low at 5713 earlier in the day. The index opened lower after the UK moved to further tighten COVID-19 restrictions in three more areas of England.

As far as the biggest movers are concerned, shares of Shaftesbury (LON: SHB) collapsed around 18% after the real-estate investor announced it will raise up to £307 million to improve its balance sheet. 

The existing shareholders - Capital & Counties (LON: SHB) and Norges Bank - will both take part in the heavily-discounted offering to increase its stakes to about 26% each. Shaftesbury decided to offer new shares at 400p that represents a discount of about 20% compared to yesterday’s loving price.

Similarly, the British Airways-owner IAG (LON: IAG) witnessed its stock price drop by around 5% after announcing a €1.3 billion operating loss for the third quarter. In more bad news for the travel industry, IAG saw its revenue tumble by 83% to €1.2 billion from €7.3 billion a year ago.

On a more positive note, the embattled cinema chain operator Cineworld (LON: CINE) decided to open 11 Regal cinemas in the New York State. Earlier this week, the New York Governor Andrew Cuomo announced that cinemas could start to reopen on October 23.

Shares of Cineworld trade nearly 50% higher this week on the slightly improved outlook for the cinema industry. 

CAC 40: Hermes and Schneider report strong numbers

In a similar fashion, the French index CAC 40 swing to positive territory after trading more than 2% in the red this morning. The old continent witnessed a record surge in the number of new Covid-19 cases with Spain, France, UK and Italy leading the way. 

In a positive development, the luxury fashion brand Hermes (EPA: RMS) reported rising comparable sales to 1.8 billion euros ($2.13 billion) in the three months to end-September.  Sales are still down 11% since the start of 2020, but the group has witnessed a faster-than-expected rebound in the luxury sector. 

Hermes share price gained over 2% to record new all-time high. 

Similarly, shares of Schneider Electric (EPA: SU) gained about 3.5% after the electrical giant topped market expectations for 3Q revenue. 

Schneider posted revenue of 6.46 billion euros ($7.65 billion) exceeding the consensus of 6.03 billion euros. As a result, the electrical behemoth raised its full-year core profit margin target to 15.1% - 15.4%, higher than prior 14.5% - 15.0%. 

Schneider now expects revenue to come between negative 5% and 7% in 2020, better than minus 7% to 10%.

Summary

Both FTSE 100 and CAC 40 trade modestly in the positive territory in the afternoon on rising hopes that a stimulus bill could be passed through the U.S. Senate before November 03 elections.