27th Oct 2026 09:06
(Alliance News) - Stock prices in London opened lower on Tuesday, dragged down by sharp losses for HSBC and Reckitt Benckiser, as investors looked ahead to the UK government's budget and the start of the US Federal Reserve's monetary policy meeting.
The FTSE 100 index opened down 108.14 points, 1.0%, at 10,659.19. The FTSE 250 was down 42.89 points, 0.2%, at 24,458.36, and the AIM All-Share was down 1.01 points, 0.1%, at 752.17.
The Cboe UK 100 was down 1.2% at 1,056.75, the Cboe UK 250 was down 0.2% at 21,522.37, and the Cboe Small Companies was marginally higher at 18,879.47.
In European equities on Tuesday, the CAC 40 in Paris was down 0.1%, while the DAX 40 in Frankfurt fell 0.4%.
The pound was quoted at USD1.3321 early Tuesday, lower than USD1.3353 at the London equities close on Monday. Against the euro, sterling edged up to EUR1.1941 from EUR1.1940 a day earlier.
The euro fell to USD1.1157 early Tuesday from USD1.1183 late Monday. Against the yen, the dollar strengthened to JPY157.78 from JPY157.53.
ING analyst Francesco Pesole commented: "The dollar has found good support early this week, as stabilising AI-related sentiment has allowed markets to reconnect with the broader supportive backdrop of a hawkish Federal Reserve and high energy prices. Pre-FOMC positioning may also be kicking in."
In the FTSE 100, HSBC was the biggest faller, sliding 6.8% despite reporting a sharp increase in third-quarter profit, maintaining its dividend and announcing a new share buyback programme.
The Asia-focused, London-based bank said pretax profit jumped 32% to USD9.63 billion in the three months ended September 30 from USD7.30 billion a year earlier.
Basic and diluted earnings per share rose 46% to USD0.41 from USD0.28.
HSBC maintained its third-quarter dividend at USD0.10 per share and announced plans for a new USD1 billion share buyback programme, which it aims to complete by its 2026 results.
The results kicked off a busy week of third-quarter earnings announcements from major UK and European banks, with fellow Asia-focused lender Standard Chartered due to report on Wednesday, and Lloyds Banking Group following on Thursday.
Reckitt Benckiser fell 5.7% after revising its full-year like-for-like revenue growth guidance for its core business to between 3.5% and 4.5%, citing manufacturing constraints affecting Lysol in North America and slower growth in China's vitamins, minerals and supplements market.
The consumer goods group reported third-quarter net revenue of GBP3.36 billion, down 6.9% on a reported basis but up 3.2% like-for-like.
The reported decline primarily reflected the disposal of its Essential Home business.
Severn Trent declined 1.7% after announcing that Chief Financial Officer Helen Miles would leave to take up the same role at housebuilder Vistry Group, whose shares jumped 4.8% in the FTSE 250.
Vistry expects Miles to join during 2027 and has appointed Robert Allen as interim CFO and board director with immediate effect.
Severn Trent said it had begun a formal search for Miles's successor, while she would remain in her current role throughout her 12-month notice period to ensure an orderly transition.
Miles has spent 12 years at Severn Trent and has served as CFO since July 2023.
Among smaller companies, Inspiration Healthcare Group surged 13% after reporting its interim results, highlighting strong underlying growth across its business and positive momentum heading into the second half.
The medical technology company reported revenue of GBP22.0 million for the six months ended July 31, down from GBP24.0 million a year earlier.
However, the prior-year period benefited from GBP6.5 million of one-off export orders.
Inspiration Healthcare said its SLE, Inspiration Healthcare and Airon businesses had delivered strong underlying growth.
Gross profit fell to GBP9.2 million from GBP11.1 million.
The company also highlighted the renewal of its revolving credit facility.
The UK government is preparing a package of cost-of-living measures ahead of Wednesday's budget, including changes to carer's allowance aimed at removing the sharp loss of benefits faced by unpaid carers who exceed an earnings threshold.
Chancellor John Healey is expected to replace the current system with a taper that would reduce benefits by GBP1 for every additional pound earned, rather than removing entitlement altogether once the threshold is breached.
Ministers also plan to make a higher tax-free mileage allowance of 55p permanent, reduce tariffs on food products including chocolate and beans, and extend parental pay to more than 150,000 parents annually.
Separately, the national living wage is expected to increase by nearly 4.0% to GBP13.20 from GBP12.71, according to the Times.
The Sun reported that fuel duty would remain frozen at 52p per litre.
Prime Minister Andy Burnham said the budget would provide further support for households and businesses facing elevated living costs.
In Asia on Tuesday, the Nikkei 225 index in Tokyo closed up 1.7%. In China, the Shanghai Composite ended down 1.3%, while the Hang Seng index in Hong Kong fell 0.7%. The S&P/ASX 200 in Sydney closed up 0.5%.
In the US on Monday, Wall Street ended higher, with the Dow Jones Industrial Average rising 0.3%, the S&P 500 gaining 0.7% and the Nasdaq Composite advancing 0.9%.
The yield on the US 10-year Treasury was quoted at 5.00% early Tuesday, widening from 4.98% on Monday. The yield on the US 30-year Treasury widened to 5.31% from 5.30%.
Brent oil was trading at USD116.39 a barrel early Tuesday, lower than USD117.02 late Monday, as diplomatic efforts to ease tensions in the Middle East continued amid renewed Houthi attacks.
Saudi Arabia, Turkey and Pakistan held talks with Iranian officials in Tehran on Monday aimed at reducing regional tensions.
Saudi Arabia said the visit was intended to establish open negotiating channels to "prevent the return of military escalation".
The four countries agreed to continue discussions aimed at strengthening cooperation on peace and security, Iranian state media reported.
Gold was quoted at USD3,994.64 an ounce early Tuesday, lower than USD4,017.92 on Monday.
Still to come on Tuesday's economic calendar, the eurozone releases money supply figures, while Ireland publishes wholesale price data.
In the US, building permits, durable goods orders, consumer confidence, the Richmond Fed manufacturing index and new home sales figures are due.
The US Federal Open Market Committee also begins its two-day monetary policy meeting.
By Eva Castanedo, Alliance News senior economics reporter
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