- FTSE 100 down 16 points to 9,701
- Manufacturing PMI better than expected
- AI trade gets another circular deal via Amazon and OpenAI
4.54pm: FTSE 100 dips
The FTSE 100 edged lower to finish Monday’s session down 15 points at 9,701.
“The FTSE 100 continues to drift, having lost the positive momentum granted by last week's losses in sterling against the dollar,” IG chief market analyst Chris Beauchamp said.
“The index has done well relative to its peers in continental Europe, but now broader concerns about the Budget are beginning to make themselves felt.”
4pm: FTSE head for a loss
The FTSE 100 is starting to stitch a new run together, a losing one this time, after ending its nine-day winning streak in the second half of last month.
Vodafone is the biggest faller, down 4.8% after a UBS downgrade to sell.
WPP Group PLC is next, down 4% today and extending its loss to almost 24% since last week's profit warning.
Drinks bottler Coca-Cola Europacific and Marks & Spencer (investors seem nervous ahead of the pair's results coming up on Wednesday), plus Croda International, JD Sports, Anglo American, Glencore, Ashtead and Rio Tinto filling out the top 10 fallers places.
3pm: Mixed start on Wall Street, but Amazon and Nvidia are doing ok
The Dow Jones Industrial Average is the one in the red, down 0.4% as more than two-thirds of the 30-company index are in the red, led by UnitedHealth, Verizon Communications, Chevron, Nike, Merck & Co and Caterpillar.
Thanks to sizeable gains for Nvidia, Amazon and Tesla, the Nasdaq opened up 0.65% and the S&P 500 rose 0.1%.
Amazon jumped over 4% after its Amazon Web Services (AWS) arm and OpenAI announced a $38 billion partnership, where AWS infrastructure will be used to run and scale OpenAI’s AI workloads, starting immediately.
Guess who makes the chips that OpenAI is running its computing power? Nvidia, of course.
OpenAI, the announcement says, "is accessing AWS compute comprising hundreds of thousands of state-of-the-art NVIDIA GPUs".
2.23pm: Tesla vote worth watching out for
There's a big Tesla shareholder vote later this week, where boss Elon Musk's $1 trillion compensation package is the key item for many investors.
Among 14 proposals for investors, there will also be a vote on whether to give Musk greater control, via restricted stock awards that would increase his voting control over the company by around 1% for each of the 12 tranches of shares in the package, which fully accrues by 2035.
On the most recent earnings call, Musk said, "There needs to be enough voting control to give a strong influence, but not so much that I can't be fired if I go insane."
The financial benefits from the proposed pay structure depend on whether Tesla achieves several challenging operational and financial milestones.
Lindsey Stewart, institutional investment expert at Morningstar, says it comes at a time when shareholder rights are firmly in the spotlight and "will provide an early insight of how investors are prioritising corporate governance issues going into 2026".
He says "shareholders are zeroing in on proposals that could reshape the balance of power for years to come. Previously environmental and social sustainability featured frequently on the Tesla proxy ballot, while governance proposals have been fewer in number but more successful".
"However, this year governance resolutions outnumber sustainability items, sending a clear signal that shareholder rights are front and centre."
As leading institutions warn of reforms that could ‘insulate the Board from accountability,’ the stakes at Tesla have never been higher for those invested in the company’s future.”
Wall Street expects Musk to get overwhelming shareholder approval for the pay package.
13.41pm: FTSE turns red
The FTSE's gain has been small this morning and now it has disappeared.
Biggest fallers in London's blue-chip index are ConvaTec Group and Vodafone Group.
ConvaTec is down as the US Centers for Medicare & Medicaid Services (CMS) issued a final decision on skin substitutes pricing late on Friday.
"The only change is that the rate will be set at $127.28, around 1.5% ahead of the initially proposed rate which doesn’t really change any of the analysis we carried out in our detailed note on skin substitutes," says analyst Seb Jantet at Panmure Liberum.
Other fallers down around 2% or more included Bunzl, Anglo American, JD Sports Fashion, Beazley, Rio Tinto and WPP Group.
1.20pm: Gold tax change in China
China has changed its tax treatment on gold, a move that could ripple through the world’s biggest consumer market for the metal.
From now on, companies that buy gold from the Shanghai Gold Exchange to turn into jewellery or industrial products will be hit with a 7% value-added tax, after being able to reclaim the full 13% VAT.
Investment in gold, including bars, coins and exchange-traded funds bought through the Shanghai Gold or Futures exchanges, remains exempt, which brings China’s regime into line with markets such as the US, UK and Switzerland.
The change effectively raises the cost of raw gold for jewellers and manufacturers, says UBS strategist Joni Teves, and follows a similar withdrawal of VAT breaks for platinum and appears part of a broader effort to harmonise China’s treatment of precious metals.
The market reaction, Teves says, is likely to be initially negative, especially given recent weakness in gold prices.
Jewellery demand, already subdued by high prices, may soften further as costs are passed on to consumers, with the investment segment standing to gain.
12.34pm: Mixed start for Wall Street expected
US stocks are set for a mixed start, the futures market suggests.
Dow Jones futures are down a handful of points, less than 0.1%, while S&P 500 and Nasdaq futures are up 0.3% and 0.6%.
This followed a month where the Nasdaq advanced the most, rising 4.7% during October as the month finished with a round of mostly impressive big-tech deals and earnings. The Dow added 2.5% and the S&P climbed 2.3%.
Data from FactSet shows 64% of S&P 500 constituents that have reported so far, with 83% having beaten expectations on earnings per share, while 79% have posted a positive revenue surprise.
"Strong corporate earnings and continued enthusiasm over the outlook for artificial general intelligence underpinned the rally," says market analyst David Morrison, who noted that Nvidia is the only constituent of the 'Magnificent 7' left to report, due in just over a fortnight’s time.
He said equities have also been lifted by what looks like a 12-month ceasefire in the US-China trade war, following a meeting between presidents Donald Trump and Xi Jinping last week, where one of the main takeaways was that China has removed its restrictions on the export of rare earths and critical minerals, while resuming its purchase of US soyabeans.
"But it quickly became apparent that there were some unresolved issues which will no doubt reemerge as bones of contention. TikTok, secondary sanctions on Russian energy and the future of Taiwan being obvious concerns," says Morrison.
US monetary policy is also a key concern of markets, with the Federal Reserve announcing a 25-basis point rate cut last week, as expected, but with Fed chief Jerome Powell surprising investors by stating that a further cut in December was not a foregone conclusion.
Hampering the Fed's decision making is a lack of economic data due to the ongoing US government shutdown, which if not resolved later this week will become the longest on record, and would also see Friday's important non-farm payroll release also delayed for the second month in a row.
"But there are some private labour market data releases to consider, including tomorrow’s JOLTS Job Openings, and Wednesday’s ADP Payroll report," says Morrison.
About 100 more S&P 500 companies report this week.
Palantir reports earnings today, and, says Neil Wilson at Saxo, will provie the market with "the latest view of the AI story", along with Qualcomm and AMD later in the week.
It's also an important reporting season in the UK - with AstraZeneca, BP, National Grid, BT, ABF, Wise, Marks & Spencer and Sainsbury's all due.
11.17am: FTSE lagging behind German DAX
The FTSE 100 has got the month off to a positive but far from spectacular start, with bigger gains seen on the European mainland, with the German DAX up 1.2% thanks to gains in industrials and financials.
Vodafone is the top faller on the Footsie 100 after UBS downgraded its recommendation on the stock to ‘sell’ after the share recovered by over a third so far this year.
Elsewhere, earnings from Warren Buffett's Berkshire Hathaway were highlighted by analyst Russ Mould at AJ Bell, as "notable for the new record cash levels", with $382 billion reported, as the investment and holding company continued to offload stocks ahead of Buffett stepping down as CEO at the end of this year.
"With the company also failing to engage in any share buybacks, it suggests a cautious view on the outlook for equities."
Ryanair, which is no longer a FTSE company but still well followed in London and the UK, released half-year numbers showing passengers up and customers paying more for tickets on average.
Profits were flying, but Mould says the comparison with last year is "going to become harder to beat as its financial year goes on, which explains some sense of caution from Ryanair in its commentary."
Chief executive Michael O’Leary, never one to miss an opportunity to have a pop at someone, has his sights focused on the European Commission this time, criticising a lack of reform in the sector as a succession of air traffic control strikes in different countries causes chaos to passengers.
"Ryanair is also one of several airline operators with an eagle eye on taxes and costs. It is no longer putting up with unfavourable tax systems, preferring to switch flights and routes to less punitive locations," says Mould.
"As a low-cost operator, every penny matters, and Ryanair has made it perfectly clear that it has no qualms in relocating to regions and airports that offer incentives to support growth."
10.55am: More data for Chancellor
While there was a positive forecast from the ITEM Club earlier, there was also a gloomy bit of news from the Office for National Statistics, though it just confirms pretty much what people were expecting.
Public sector productivity fell at its sharpest rate in nearly three years, the ONS says, due to NHS waiting lists dragging on the economy.
This is something that Rachel Reeves specifically addressed as recently as last week, when she said higher taxes and spending were needed to deal with waiting lists to help improve productivity across the whole country.
Public service productivity fell 0.7% in the second quarter of the year, which was the worst since the final strike-hit quarter of 2022.
An expected UK productivity downgrade by the Office for Budget Responsibility is one reason why the black hole in public finances needs extra policy-filler at the Budget next month.
10.35am: Time will tell about PMI boost
Time will tell if the improved UK manufacturing sentiment in the October PMI is a temporary rebound in output rather than a sustained recovery, says Mike Thornton, head of industrials at RSM UK.
The uptick in manufacturing activity in October reverses the downward trend seen in August and September, following Jaguar Land Rover’s phased production restart which he says is likely to have has "created a ripple effect throughout the supply chain, particularly as the shutdown impacted over 5,000 middle market businesses".
The JLR restart is likely to be reflected in the increase to new orders, employment and output indices, as businesses look to address backlogs of work.
"However, there are wider signs of domestic improvement, with input prices dropping to their lowest level since December 2024, suggesting inflationary pressures are easing.
"This has offered some relief to manufacturers following months of price pressure."
RSK economist Thomas Pugh says the rebound in activity is good news for the wider economy.
"So far at least, the survey data has been surprisingly resilient to concerns about large tax rises in the upcoming budget, but we still doubt that the economy will do little more than stagnate in Q4.
"Meanwhile the drop in the input prices balance to its lowest level this year will be further evidence to the MPC that the disinflation trend is still intact."
He does not think it will be enough to tempt the MPC into a rate cut at Thursday's meeting, but "does help open the door to a cut in December".
9.52am: PMI thoughts
The bounce in UK manufacturing PMI "could prove short-lived", says Rob Dobson, director at S&P Global Market Intelligence, which produces the report.
"Not only did October see auto sector supply chains benefit from the production restart at JLR, which will provide only a temporary spike in production, but sluggish demand from both domestic and overseas markets meant October’s output growth was dependent on firms eating into backlogs of orders placed in prior months and allowing unsold stock to accumulate.
"There are also concerns the forthcoming Budget will exacerbate the lingering challenges created by last year’s Budget, especially in relation the impact of NMW and employer NICs on costs, demand and production.
"This means that business optimism remains below its long-run average despite rising to an eight-month high in October.
"Manufacturers seem to be stuck in a holding pattern until the domestic policy and geopolitical backdrops exhibit greater clarity."
9.41am: Manufacturing PMI better than expected
The UK manufacturing purchasing managers' index for October has improved slightly, as output rises for the first time in a year.
A final reading of 49.7 is published, up from 46.2 in September and above the 49.6 'flash' reading mid-month.
Three of the S&P Global PMI constituents -- new orders, employment and stocks of purchases -- saw contractions, while output and suppliers' delivery times were "at levels consistent with improved operating conditions", the report said.
Responses to the survey suggested that production volumes rose in the consumer and intermediate goods industries, with the latter outperforming thanks to companies linked to car manufacuring from the staged restarting of production at Jaguar Land Rover.
However, demand from both domestic and overseas markets decreased, with October seeing total new business shrink for the 13th month in a row, although to a lesser extent than in September.
Business optimism climbed to an eight-month high, though still remains below the long-run average.
9.21am: Good news for Chancellor on GDP forecasts
A burst of government spending has delivered some long-awaited good news for Chancellor Rachel Reeves ahead of the Budget later this month.
The EY Item Club has lifted its growth forecast for this year, predicting the UK economy will expand by 1.5% in 2025, up from its earlier estimate of 1%.
The upgrade comes after stronger-than-expected growth in the first half of the year, when output rose 0.7%, the fastest in the G7.
EY said the momentum was “largely due to increases in government spending”, with the Office for Budget Responsibility estimating total expenditure of £1.3 trillion this fiscal year and last, roughly £100 billion higher than in 2023-24.
However, the think tank warned the upturn will be short-lived. Growth is forecast to slow to 0.9% next year as Reeves faces pressure to fill a widening fiscal gap.
Economists expect tax rises of up to £40 billion to offset higher borrowing costs and weaker productivity, with speculation mounting that income tax rates could rise despite Labour’s election pledge.
EY said higher taxes, sluggish global trade and still-elevated interest rates would weigh on the economy in 2026, before growth stabilises around 1.3% in 2027.
8.34am: Winvia completes AIM IPO at £205m market cap
London's run of flotations continued into a new month, with the arrival of Winvia Entertainment PLC (AIM:WVIA), a lottery and gaming operator in the UK and Romania, after raising £40 million in a placing with institutional investors.
The shares were issued at a price of 195p apiece, which gave it a debut market capitalisation of £205 million.
As well as the IPO placing round being "substantially oversubscribed", the shares have risen 7.7% to 210p in today's early dealings.
Winvia is majority owned by Teddy Sagi, the billionaire founder of Playtech PLC (LSE:PTEC), whose Globe Invest family office vehicle bought Best of the Best for £45.3 million in 2023 and has shifted it into Winvia, alongside some Romanian online gaming websites.
8.14am: FTSE opens week and month on front foot
The FTSE 100 has started the week and the first business day of the month on the front foot, climbing 27 points initially.
This is thanks to gains for Asia-focused financials Prudential and Standard Chartered, along with oil giants BP and Shell, and precious metals miner Fresnillo.
Brent crude oil prices are up 0.4% at just over £65, while gold and silver are both up around 0.5% at $4023 and $49 an ounce, respectively.
8am: Saatchi says no
M&C Saatchi PLC (AIM:SAA) has rejected a £50 million offer from Bave Bison (AIM:BBSN) for its Singapore-based performance marketing division, known as M+C Saatchi Performance (MCSP).
The Saatchi board was said to be of the view that the offer "fundamentally undervalues the division and does not reflect the future prospects for the division which forms a core element of the company's growth plans".
It said no talks have been held since receiving the offer.
Brave Bison said it wanted to combine MCSP with its own existing performance marketing operations to form a "scaled digital media challenger to the global marketing networks", which it said would be one of the largest such firms outside the US, with a market-leading presence in UK and Asia Pacific.
7.32am: Not much FTSE 350 company news about
It's pretty quiet on the FTSE 350 corporate news front. Here's two of the best and you'll see what I mean.
Intertek Group PLC (LSE:ITRK) has acquired a provider of food safety and medical devices testing services based in Costa Rica.
Suplilab generated revenues of £3.1 million last year and "will enable Intertek to establish a leading position in Costa Rica's food and medical devices sectors".
Something we all dream of.
Capita PLC (LSE:CPI), meanwhile, has won a contract extension for its call centre business wit Samsung in the UK, answering calls, emails and social media queries from people who have bought mobile phones, TVs and other products from the Korean colossus.
The outsourcer will "deliver impactful transformation", it said, including a pilot of its Agent Suite generative AI platform that supports contact centre agents, such as by summarising calls, suggesting responses, or automating routine queries.
Capita, which has worked with Samsung UK since 2011, says the AI-backed approach "aligns with and supports Samsung’s mission to inspire consumers to adopt the company’s innovative technology".
7.17am: FTSE to start November on front foot
The FTSE 100 is predicted to begin November trading marginally on the front foot, ahead of a busy week of company news, economic data and a knife-edge Bank of England decision.
Futures are calling the London benchmark 12 points higher on Monday, after last week finished with the index ending its winning run after 10 days, closing down 42.44 points on Friday at 9,717.25, but still having gained over 220 points during October.
Wall Street stocks closed the week higher, with the Nasdaq rising 0.6%, the S&P 500 climbing 0.3% and the Dow Jones finishing the day just above flat.
October was the sixth monthly gain for the S&P, a stretch not seen since 2021, according to analysts at Deutsche Bank, who also flagged Japan’s Nikkei having its best month in 35 years and, despite a recent pullback, gold climbing above $4,000 an ounce and silver posting a sixth consecutive monthly gain for the first time in 45 years.
Oil prices are up slightly, after an OPEC meeting at the weekend where it announced a halt in additional supply between January and March, following a 137,000 barrels per day increase in December.