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London open: FTSE dips as wariness sets in ahead of Budget
London stocks dipped in early trade on Friday as investors mulled a decline in consumer confidence and as wariness set in ahead of next week’s Budget.
At 0840 BST, the FTSE 100 was down 0.1% at 8,258.78.
A survey released earlier by GfK showed that UK consumer confidence fell slightly in October, with consumers in a “despondent” mood ahead of the Budget.
GfK’s consumer confidence index nudged down one point to -21, falling back down to the level last seen in March this year.
Neil Bellamy, consumer insights director at GfK, said: “As the Budget statement looms, consumers are in a despondent mood despite a fall in the headline rate of inflation.
“This month’s consumer confidence barometer paints a picture of people holding their breath to see what’s in store for them on 30th October.”
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “The FTSE 100 is in a holding pattern at the end of the week, as the UK Budget looms and investors remain highly cautious. The index has opened lower, with little to ignite overall investor sentiment. However, buoyant results from NatWest, as it joined the banking results party, did provide some cheer with the stock more than 3% higher in early trade.
“As the guessing game continues about what Chancellor Rachel Reeves will include in her first Budget, it’s dented consumer confidence in the UK. A closely watched survey from GfK indicates that a despondent mood has taken hold ahead of revelation of the government’s tax and spending plans with concerns about the UK economy rising.
“GfK’s consumer confidence survey fell one point to -21 in October from -20 in September. This is the lowest since March, when the former Conservative Chancellor Jeremy Hunt delivered his last Budget. However, with fresh interest rate cuts expected optimism around consumers’ finances and confidence about making major purchases ticked up. This will provide hope that once the government’s financial plan becomes clear, uncertainty may ease off and overall consumer confidence may rebound.”
On the corporate front, NatWest jumped to the top of the FTSE 100 as it raised its full-year income forecasts after a strong third quarter, in which profits jumped by 34.6% on last year.
Profit for the three months to 30 September totalled £1.24bn, up from £924m, as total income rose 7.3% to £3.49bn.
The banking group said it now expects to achieve a return on tangible equity above 15%, up one percentage point on previous guidance, while adjusted income should come in at £14.4bn, compared with an earlier forecast of £14bn.
Airtel Africa slumped as it reported a 16.5% drop in first-half earnings before interest, tax, depreciation and amortisation.
SSE was knocked lower by a downgrade to ‘sell’ at Citi. The bank said: “SSE has an attractive set of networks and renewable assets. However, we are increasingly concerned around the deployment of its offshore wind fleet and see risks of further delays, which could impact EPS and/or returns.”
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Natwest Group Plc | +4.06% | +14.70 | 376.50 |
| 2 |  |
Banco Santander S.a. | +2.38% | +9.00 | 387.50 |
| 3 |  |
Schroders Plc | +1.53% | +5.40 | 358.60 |
| 4 |  |
Crh Plc | +1.51% | +106.00 | 7,134.00 |
| 5 |  |
Ck Infrastructure Holdings Limited | +1.28% | +6.90 | 547.90 |
| 6 |  |
Pershing Square Holdings Ltd | +1.18% | +42.00 | 3,610.00 |
| 7 |  |
Hsbc Holdings Plc | +1.00% | +6.80 | 686.70 |
| 8 |  |
Investec Plc | +0.93% | +5.50 | 595.00 |
| 9 |  |
Ashtead Group Plc | +0.85% | +50.00 | 5,928.00 |
| 10 |  |
Smurfit Westrock Plc | +0.77% | +27.00 | 3,546.00 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Smith & Nephew Plc | -2.72% | -30.50 | 1,091.50 |
| 2 |  |
Intertek Group Plc | -2.23% | -108.00 | 4,728.00 |
| 3 |  |
Wpp Plc | -1.69% | -14.00 | 816.20 |
| 4 |  |
Wise Plc | -1.60% | -12.00 | 737.00 |
| 5 |  |
Fresnillo Plc | -1.23% | -9.50 | 762.00 |
| 6 |  |
Gsk Plc | -1.03% | -15.00 | 1,440.50 |
| 7 |  |
Coca-cola Europacific Partners Plc | -0.99% | -60.00 | 6,020.00 |
| 8 |  |
Sage Group Plc | -0.98% | -10.00 | 1,011.00 |
| 9 |  |
Sse Plc | -0.97% | -18.00 | 1,829.00 |
| 10 |  |
Woodside Energy Group Ltd | -0.97% | -12.00 | 1,222.00 |
US close: Stocks end mixed, but Tesla lifts Nasdaq higher
US markets ended mixed on Thursday as investors digested a barrage of economic data and corporate earnings amid ongoing political uncertainty, but a surge in Tesla‘s stock pushed the Nasdaq firmly higher.
The Dow finished down 0.3% at 42,374.36, falling for its fourth straight day to its lowest since 8 October, while the S&P 500 edged 0.2% higher to 5,809.86. The Nasdaq however jumped 0.8% to 18,415.49.
Market sentiment over recent days has been dominated by rising political uncertainty ahead of the US elections – which remain too close to call – as well as nervousness around the future path of monetary policy worldwide after numerous Fed policymakers called for more gradual rate cuts.
“This election is too close to call, and the prospect of no clear winner cannot be ruled out,” said Kathleen Brooks, research director at XTB. “The market may be pricing in a higher chance of a rate cut from the Fed in November, partly because no clear outcome from this election could hit economic sentiment and weigh on economic growth, forcing the Fed into more rate cuts.”
Economic data in focus
On the macro front, US initial unemployment claims fell by 15,000 week-on-week to 227,000, according to the Labor Department, the lowest reading so far this month and well below market expectations for a flat print of 242,000.
The Chicago Fed’s national activity index decreased to -0.28 in September, down from a revised reading of -0.01 in August.
The S&P Global composite PMI increased to 54.3 in October, up from 54.0 in September, signalling a “further solid rise in business activity to mark a robust start to the fourth quarter”, S&P Global said. Confidence hit a 29-month high, though employment declined as spending remained cautious ahead of the election.
Meanwhile, new home sales jumped 4.1% to a seasonally adjusted annual rate of 738,000 in September, according to the Census Bureau. This was the highest reading since May 2023 and ahead of forecasts for a print of 720,000.
Tesla rockets
Shares in Tesla finished 22% higher, recording their best daily performance since 2013, on the back of a 17% jump in third-quarter net income. Helping sentiment was a bullish forecast by founder Elon Musk who expects the company to see vehicle growth of 20-30% in 2025.
Offshore drilling company Seadrill jumped 10% on reports it is in discussions with rival Transocean regarding a potential merger. According to Bloomberg, the two companies had discussed details about the potential structure of a tie-up, though no decisions have yet been made.
Intel gained 2% after emerging victorious in a lengthy legal battle with the EU, as the bloc’s top court ruled in its favour, dismissing a €1.06bn antitrust fine. The ruling by the ECJ marked the conclusion of a dispute that started in 2009, when the European Commission accused Intel of abusing its market dominance by offering rebates to major computer manufacturers including Dell, HP and Lenovo, to favour its chips over those of rival AMD.
Tech peer IBM dropped 6% as third-quarter sales rose by just 1.5% in the third quarter to $14.97bn, missing the $15.07bn consensus forecast, as it guided to a similar top-line result in the fourth quarter.
Logistics firm United Parcel Service jumped 5% after beating quarterly profit expectations as the group benefitted from improved volumes and tight cost controls. UPS said adjusted profits had grown to $1.76 per share, ahead of analysts’ estimates of $1.63 per share.
Friday newspaper round-up: Tax rises, WiseTech Global, heat network zones
City firms are only rarely docking pay and bonuses in cases of bad behaviour including sexual harassment, bullying and drug use, according to the industry’s watchdog, which recorded a 40% rise in complaints about non-financial misconduct last year. The findings are the result of the City regulator’s first survey looking at the issue, which was launched in the wake of high-profile allegations of sexual harassment, including those against individuals at the Confederation of British Industry (CBI) lobby group. – Guardian
Keir Starmer has hinted at tax rises for those who earn their income from shares and property, saying that they did not fit his definition of “working people”. Ministers are expected to announce increases in inheritance tax and capital gains tax (CGT) in the budget next week. – Guardian
Excess heat from data centres and factories will be pumped into thousands of English homes to keep them warm under new plans announced by ministers. Seven “heat network zones” are planned, with one in Leeds, Plymouth, Bristol, Stockport and Sheffield, and two in London, to share warmth across urban areas via underground pipe networks. The networks will transfer excess or unused heat out of some buildings to others nearby such as residential apartment blocks. – Telegraph
Richard White, the billionaire tech pioneer, has resigned as chief of WiseTech Global in Australia after weeks of lurid allegations wiped billions from the market capitalisation of the company he founded 30 years ago. The departure of White, 69, a tech entrepreneur who started his career repairing guitars for the band AC/DC, followed an investigation by the Australian newspapers the Financial Review, The Sydney Morning Herald and The Age which alleged that he purchased multimillion-dollar houses for a string of women he had been in secret relationships with. – The Times
Rachel Reeves has been warned by the Labour grandee Lord Blunkett that imposing national insurance on employers’ pension contributions risks damaging people’s standard of living in their retirement. The chancellor is expected to use her budget on October 30 to announce plans to impose national insurance on employers’ pension contributions as she seeks to balance the books. The measure is expected to raise about £15 billion. – The Times
