30th Oct 2024 12:03
(Alliance News) - Stock prices in London were mixed heading into Wednesday afternoon and the UK budget announcement, and the pound surrendered some early progress with the mood tetchy before the spotlight turns to Chancellor Rachel Reeves.
The FTSE 100 index traded down 42.68 points, 0.5%, at 8,176.93. The FTSE 250 was up just 3.96 points at 20,626.75, and the AIM All-Share was up 0.98 of a point, 0.1%, at 716.77.
The Cboe UK 100 was down 0.6% at 818.74, the Cboe UK 250 was flat at 18,174.71, and the Cboe Small Companies was down 0.9% at 16,481.46.
In European equities on Wednesday, the CAC 40 in Paris was down 1.6%, while the DAX 40 in Frankfurt fell 1.0%.
Ahead of the budget, the pound was quoted at USD1.2969 early Wednesday, fading from USD1.2991 at the London equities close on Tuesday. It had traded as high as USD1.3026 earlier Wednesday.
Eyes will also be on the bond market.
"Gilts have caught a bid ahead of the budget and are off nearly six basis points," Bannockburn Global Forex analyst Marc Chandler.
The yield on the 10-year gilt eased to 4.23%, having been at 4.31% late Tuesday.
In focus will be how bond markets react, if at all, to an expected confirmation on a new measure of debt. Reeves is expected to target public sector net financial liabilities in the calculation. The measure includes "all financial assets and liabilities recognised in the national accounts", according to the ONS.
XTB analyst Kathleen Brooks commented: "We do not think that this budget will rattle markets to the extent that Liz Truss's mini budget in 2022 did. Instead, the reaction could hinge on growth forecasts, which could dramatically shift Bank of England rate cut expectations. If the fiscal largesse in this budget, including large increases to public sector pay and to the minimum wage, along with investment measures, boost growth forecasts for the medium term, then this could be inflationary. This would justify higher yields, it may also hinder the BoE's ability to cut rates, which may push up interest rate swaps."
Measures on capital gains tax and whether London's junior AIM market loses a coveted tax incentive will also be in focus.
The euro stood at USD1.0826 early Wednesday afternoon, climbing from USD1.0795 at the time of the European equities close on Tuesday. Against the yen, the dollar was trading at JPY152.96, down from JPY153.56.
The eurozone's gross domestic product climbed by more than anticipated in the third quarter of the year, preliminary Eurostat data showed on Wednesday.
The eurozone seasonally adjusted GDP rose by 0.4% on-quarter in the third quarter, up from 0.2% in the second quarter. It outperformed FXStreet-cited consensus expectations of a 0.2% climb.
Away from the UK budget, US data will also be in focus in the afternoon. The ADP employment report is at 1215 GMT, before GDP data at 1230 GMT.
In London, Standard Chartered rose 3.1% as the Asia-focused lender upped annual guidance. It now predicts operating income growth of 10% this year at constant currency. It had previously predicted a rise of 7%. It also raised its shareholder distribution target for the 2024 to 2026 period.
"We are increasing both our 2026 [return on tangible equity] target from 12% to approaching 13%, and our shareholder distribution target from at least USD5 billion to at least USD8 billion from 2024 to 2026," Chief Executive Bill Winters said.
Anglo American fell 3.1% as one-time suitor BHP said it has "moved on". BHP Chair Ken MacKenzie said at the miner's annual general meeting in Brisbane, Queensland, that BHP believed the two companies could have created "something unique and special". He described a BHP-Anglo tie-up as a "one plus one equals three opportunity".
"Unfortunately, Anglo American shareholders had a different view, and they thought there was more value in the plan that their management wanted to execute. And so they moved on. And quite frankly, so have we," MacKenzie added.
BHP shares fell 2.1%.
Packaging firm Smurfit WestRock added 3.7%. It achieved net sales of USD7.67 billion in the third-quarter of 2024. In the third-quarter of 2023, sales of USD2.92 billion were reported, though this did not include the WestRock business. The combination between Smurfit and WestRock took effect in July.
Adjusted earnings before interest, tax, depreciation, and amortisation totalled USD1.27 billion in the third-quarter, compared to USD525 million in the WestRock-less prior year.
Elsewhere in London, Induction Healthcare jumped 12%. The software company serving healthcare providers and administrators signed a GBP1.5 million deal to "transform patient access to diagnostic tests" in the North Central London Integrated Care System.
The system is a partnership of NHS, councils, and voluntary sector organisations in the London areas of Barnet, Camden, Enfield, Haringey, and Islington.
"Induction will be the first portal provider to integrate disparate electronic systems across a region to facilitate diagnostic tests for patients, while at the same time giving patients greater control over their care," Chief Executive Officer Paul Tambeau said.
Brent oil was quoted at USD71.52 a barrel early Wednesday afternoon, rising from USD71.11 late Tuesday afternoon. Gold traded at USD2,781.56 an ounce, up from USD2,765.34.
By Eric Cunha, Alliance News news editor
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