27th Nov 2025 06:57
(Alliance News) - Stocks in London are set to open slightly lower on Thursday, with the FTSE 100 returning a fraction of the advance it made following the UK budget on Wednesday.
IG says futures indicate the FTSE 100 to open 12.4 points lower, 0.1%, at 9,679.18 on Thursday. The index of London large-caps closed 82.05 points higher, 0.9%, at 9,691.58 on Wednesday.
Sterling traded at USD1.3249 on Thursday morning, up from USD1.3232 at the time of the London equities close on Wednesday. The euro slipped to USD1.1593 from USD1.1598. Against the yen, the dollar fell to JPY156.15 from JPY156.35.
The pound rose as high as USD1.3268, its best level since late-October.
The UK chancellor on Wednesday laid out a raft of tax raising measures as she seeks to increase her fiscal buffer and calm nerves in financial markets.
The increases worth an estimated GBP26 billion will be achieved through a freeze of income tax thresholds, a raid on salary sacrifice schemes and a range of smaller measures, offsetting extra spending.
Rachel Reeves delivered her second budget after an unprecedented early release of budget measures and economic forecasts by the Office for Budget Responsibility.
Rachel Reeves told MPs that the pre-budget publication of the Office for Budget Responsibility's document was "deeply disappointing and a serious error on their part".
Commerzbank analyst Michael Pfister commented: "The announcements contained a lot of positive news: the headroom relative to the fiscal rules for the 2029/30 fiscal year increased to GBP22 billion (from GBP9.9 billion), and although taxes were significantly increased (with an expected additional revenue of GBP26 billion), the changes appear to be more balanced this year and are not expected to further fuel inflation. Although the OBR revised its overly optimistic growth forecasts, the correction was not too big. The growth forecasts are still somewhat optimistic but much more realistic, which should limit the need for significant future corrections.
"The capital markets seemed to welcome the changes with relief: government bond yields fell significantly, and the pound closed slightly higher after a volatile day. However, one problem remains. Spending is likely to increase significantly over the next two years, with more savings planned for 2029/30 when the fiscal rules take effect. However, the elections will already be approaching by then, making it doubtful that these tax increases, which are intended to balance the budget, will actually be implemented."
In New York on Wednesday, the Dow Jones Industrial Average and S&P 500 each added 0.7%, while the Nasdaq Composite rose 0.8%.
Pepperstone analyst Michael Brown commented: "Markets enjoyed another risk-on day as we cruised into Thanksgiving. Stocks, as such, gained ground on both sides of the Atlantic, with the recent wobble seemingly now firmly in the rear view mirror, as dip buyers have again wrestled back control, with most major benchmarks having reclaimed their respective 50-day moving averages.
"I feel like it's too early to start throwing the words 'Santa Rally' around, but we do seem to be setting up for further gains into year-end."
In Tokyo on Thursday, the Nikkei 225 was up 1.2%. In China, the Shanghai Composite was 0.4% higher, while the Hang Seng Index was up 0.3%. In Sydney, the S&P/ASX 200 edged up 0.1%.
The yield on the US 10-year Treasury narrowed to 3.99% on Thursday morning UK time, from 4.01% at the time of the London equities close on Wednesday. The 5-year yield eased to 4.64% from 4.66%.
A barrel of Brent fell to USD62.19 from USD62.41. Gold slipped to USD4,156.61 an ounce from USD4,163.25.
Thursday's economic calendar has eurozone consumer confidence figures. Financial markets are closed in the US for Thanksgiving Day.
Thursday's UK corporate calendar has half-year results from motor and cycle retailer Halfords and water utility Pennon Group.
By Eric Cunha, Alliance News news editor
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