- FTSE 100 up 11 points to 9,911
- SSE surges on £3bn pivot to electricity transmission
- BAE Systems reports big jump in orders
5.06pm: Another day, another record
The FTSE 100 has notched a new record close for the third straight day, up 11 points at 9,911.
“While tech stocks come under pressure on Wall Street, the FTSE 100 has managed to hold at the record high set earlier today,” IG chief market analyst Chris Beauchamp said.
“Government turmoil in the US is set to give way to more drama at Westminster, though for now any market jitters are confined to the area of gilt yields. There has been a solid recovery in Europe too, as the global market rally enters a new phase.”
4.09pm: FTSE hits new intraday high, SSE and Games Workshop top risers
The FTSE notched up another intraday high a short while ago, clambering above 9,930 for the first time, before easing back again.
SSE remains the top riser, up over 15% now, after unveiling a new five-year investment plan that was more ambitious than many expected.
Next is Games Workshop, which has stomped 6.75% higher after a bullish note from Jefferies, which raised its price target as it highlighted the company’s long-term growth prospects despite near-term profit pressures.
Analyst Andrew Wade says the shares are "not optically cheap", but the company is “an asset of rare quality", with the success of the Space Marine 2 video game demonstrating "the potential for the Warhammer universes to reach a more mass-market customer – and to convert those customers into miniature-buying hobbyists".
Precious metals miners Endeavour Mining and Fresnillo are up 3.7% and 2.4%.
Burberry is up 4% ahead of half-year results tomorrow, with previous quarterly results showing sales trends improving, moving from 20% declines a year ago to a low single-digit decline.
Jelena Sokolova, senior equity analyst at Morningstar, says: "We expect Burberry to sustain its improving sales trends, supported by stronger brand traction and a slightly more favourable macroeconomic backdrop, as indicated by competitors' recent reports.
"We believe Burberry’s performance is being driven by self-help initiatives introduced by CEO Joshua Schulman. In particular, we favour its strategy of focusing on core outerwear and scarves - where the brand is most differentiated - alongside smart marketing campaigns that emphasise British heritage with humour".
2.47pm: Uneven start on Wall Street, Nasdaq in red
It was initially a positive start on Wall Street, but is quickly looking uneven.
The Dow Jones has extended gains, rising to new record highs, up 0.7% to above 48,270.
The S&P 500 has advanced 0.2%, while the Nasdaq has lost its initial positive momentum and dropped slightly into the red, down just a handful of points.
Nvidia is back up 0.7%, but Apple, Microsoft, Alphabet, Tesla, Netflix are all down slightly, while Palantir has dropped another 2.3%.
1.53pm: SSE constrained capacity
More on SSE, after it unveiled its new five-year investment plans.
A big part of the reason why it is investing more in transmission and distribution is clear from the details of its interim results.
The company said: “Given the challenging market and policy environment, SSE is unlikely to meet its ambitious goal of 50 terawatt-hours (TWh) of renewable generation output by 2030.”
It generated 5.4 TWh in the six months to September, following 13 TWh of output last year.
Roughly 23% of the output from its onshore and offshore wind farms was "constrained" in the half-year, meaning a lack of capacity in the UK electricity grid meant it was often paid to switch off its turbines temporarily.
Most of its £33 billion investment is in transmission, ie improving connections such as pylons, underground cables and substations to bring power from wind farms (mostly in offshore northern Scotland) to towns and cities demanding the energy (mostly much further south, in England).
12.25pm: Demand for UK bonds
The support for Keir Starmer (and Rachel Reeves) from the bond market has been further shown by record demand for the latest issue of index-linked UK government debt.
Despite the reported attempts to try and prepare the ground for a 10 Downing Street coup, and uncertainty ahead of the budget later this month, today's auction for inflation-linked bond maturing in 2038, has attracted record demand.
Per Reuters: "Orders for the 1.75% September 2038 inflation-linked bond topped £69 billion, a bookrunner said, beating a previous record of £67.5 billion for an index-linked gilt sold via syndication in March."
The government sold £4.25 billion of bonds, which were priced to yield 10.5 basis points above the 1.125% index-linked gilt due in 2037.
Goldman Sachs, JP Morgan, Nomura and Santander comprised the joint leads for the syndicate for Wednesday's sale, Reuters said.
Index-linked bonds are designed to benefit investors as both the interest and the principal payments rise or fall in line with inflation, while lowering the cost of the government's interest rates, as long as inflation does not increase dramatically.
11.48am: Footsie underperforming
The FTSE 100 is underperforming European stocks today, with the German DAX and French CAC both up around 1% as they climb back towards their record highs from last month.
Communication, consumer discretionary and the real estate sector are all acting as a drag on the index, says Kathleen Brooks, market analyst at XTB.
She says this reflects "concerns about economic growth," including a downbeat update from Taylor Wimpey, who said that tax changes in the Budget could impact home sales.
"When home builders slow, it can be a lead indicator for economic weakness, which could thwart FTSE 100 gains in the short term."
However, Brooks notes that the Footsie has been resilient to weaker growth, budget risk and political noise this year, and in recent days, outperforming the S&P 500, the Eurostoxx 50 index and is performing at the same level as the tech-fuelled Nasdaq.
The UK index is up more than 21% on a USD basis and 26% on a currency-adjusted basis.
Gilts are also in focus this morning, again the weakest performers in Europe so far this morning, on the reports mentioned below about attempts by Keir Starmer's opponents in the Labour Party to prepare for a Downing Street coup if the Budget is seen as a failure.
UK bond yields are only seeing "a small move", says Brooks, which "does not compare with the bond market tantrum in the summer when rumours circled that Rachel Reeves would be sacked".
Reeves and Starmer’s plan to increase income taxes to pay for public spending has "been well absorbed by the bond market".
The pound is on the slide again, after rebounding in recent days, with recent hopes for a BoE rate cut contributing to a 1.5% fall versus the US dollar in the past month.
11.06am: Avon calling
One of the big risers in the FTSE 250 is recently promoted Avon Technologies PLC (LSE:AVON), up 7% after the defence equipment group upgraded its assessment of prospects on the back of a record order book and improving margins.
For the year to 30 September, revenue increased 14% and adjusted profit before tax climbed 38%.
The order book advanced 16.7% to $262.8 million, giving management “confidence in the 2026 financial year and beyond.”
Analyst Andrew Douglas at Jefferies says EPS is 5% ahead of his forecasts, and although net debt is a touch ahead, "these are better-than-expected results almost across the board".
"Management continues to execute well, and there is very good momentum across the business. A number of medium-term targets have been achieved 2 years ahead of plan, underlying markets are growing well, there is a record order book (gives good coverage for the current year), and there is a balance sheet to support the group's OCC ambition and pursue bolt-on M&A."
10.22am: FTSE slips into red
The FTSE has dropped back into the red.
Retailers and housebuilders are dominating the fallers list, including 3i Group, whose major investment is in a European discounter, Tesco, Auto Trader, Sainsbury, Next, Persimmon and Berkeley.
There's also Experian, down 1.6% despite hiking its dividend 10% and upping its guidance.
Airline easyJet, caterer Compass Group and defence group Babcock are also down over 1%.
Could bonds be having an influence? The 10-year gilt yield is up 4 basis points, though this is from almost a one-year low.
UK politics has been known to have an influence on the gilt market this year, and there are headlines about Downing Street getting into defensive mode over a potential challenge to Keir Starmer's leadership.
Starmer’s allies accused Wes Streeting of plotting a leadership coup, warning it could “trigger a market shock”. A Streeting aide dismissed the claims as “categorically untrue”.
Bloomberg's political editor posted on social media that "a supporter of Starmer says tonight that they conducted a recent exercise with investors where they were told that any alternative to Starmer and Rachel Reeves would result in a significant rise in gilt yields, meaning higher government borrowing costs. That would be ruinous for the public finances and plunge the UK into an economic crisis, the person added, a clear indication that No10 is seriously concerned about a leadership plot."
9.26am: Smithson proposes delisting and becoming OEIC
Interesting moves in the investment trusts world, specifically Smithson Investment Trust PLC (LSE:SSON), the vehicle run by Terry Smith's fund house.
Shares are up 6.7% after it proposed rolling over into a new unlisted, open-ended investment company, proding another 'win' for activist investor Saba Capital.
Under the proposal announced this morning, all assets of the investment trust would be transferred into a new OEIC fund, in a move aimed at resolving the persistent discount to net asset value at which its shares have traded since 2022.
Under the plan, shareholders can either roll their holdings into the newly established Smithson Equity Fund – which will be managed by Fundsmith with the same investment strategy – or take a full cash exit at NAV, less costs. The default option will be to roll over into the new fund. Smith, who owns a 2.3% stake, supports the move, as does Saba.
Analyst Iain Scouller at Stifel said the proposal "provides a blueprint as to the type of option that boards should consider in order to enhance shareholder value, in situations where discounts in excess of 10% persist over a long period of time".
He adds: "This also appears to be another 'win' for Saba, which owns 16.05%. After their unusual attempts to take on management contracts for a number of investment trusts earlier this year, which all failed, Saba's more conventional approach of supporting tenders and mergers is bearing fruit."
8.37am: Taylor Wimpey sales rate slows
Taylor Wimpey shares are the biggest faller on the FTSE 250, after the housebuilder reported a slowdown in its sales rate, but said it remains on track to meet its full-year 2025 expectations for UK completions and group operating profit.
The net private sales rate has slowed to 0.63 in the second half, from 0.79 per outlet per week at the half-year stage, though the cancellation rates is unchanged at 17%.
It added that government planning reforms were showing early signs of progress, supported by increased engagement with local authorities. However, in the short-term, it said the market was being held back as homeowners wait to see what is announced in the Budget later this month.
8.14am: FTSE opens at new record high
The FTSE 100 has climbed, fairly decisively, above the 9,900 mark in early trading, defying the cautious futures market predictions.
It's up 20 points to 9,920, hitting a new intraday record high of 9,928 in initial trades.
SSE PLC (LSE:SSE) is leading the way, up 11.8% after its "once-in-a-generation" investment strategy announcement (see below).
BAE Systems is just above flat after its trading update, up 0.1% after an early splash into the red.
7.59am: BAE maintains outlook, says no material effect from US shutdown
BAE Systems PLC (LSE:BA.) has kept its sights locked on guidance for the current year, underpinned by strong operational and financial performance in the second half and supported by a growing order book.
After 10 months, the FTSE 100-listed defence giant reported more than £27 billion of order intake, up from £13.2 billion at the half-year stage, thanks in part to the £4 billion contract with Türkiye to supply 20 Typhoon aircraft and related weapons.
Management is encouraged by recent actions to end the US government shutdown and said that, to date, "we do not see material effects on our US business. If the shutdown persists, delays to contract funding and timing of payments before year end are possible."
7.36am: SSE announces pivot to transmission and distribution
Wind farm and hydroelectric power station operator SSE PLC (LSE:SSE) has outlined a £33 billion, five-year strategy to significantly increase its capital allocation into UK electricity infrastructure, which it called a "once-in-a-generation investment opportunity".
Most of the cash (£27 billion) will be invested in transmission, such as networks to connect wind farms to cities, the company expects the investment programme to more than treble its regulated asset base, and to see earnings rise in tandem, with adjusted earnings per share targeted to reach 225-250p by the end of the period, representing a 7-9% compound annual growth rate.
It plans to generate £21 billion of the funds from operational cashflows, £14 billion from additional net debt and hybrid capital, £2 billion from an equity placing, and a further £2 billion from asset sales.
SSE also reported interim results showing adjusted earnings per share of 36.1p, in line with expectations, with £1.6 billion invested, mostly in regulated networks. Guidance for the current and next year's full-year earnings and operating profit was reaffirmed.
7.17am: FTSE brakes to be applied
The FTSE 100's brakes are set to be applied on Wednesday, after two days where the index added over 230 points to climb to within sight of 10,000.
On the futures market, a drop of 1.5 points was the call ahead of the open, a day after the London benchmark added 112.45 points to close at 9,899.6.
Overnight on Wall Street, it was a mixed session, with the Dow Jones rose 1.2% to a fresh all-time high, boosted by optimism that Washington could soon end the record-long government shutdown.
The S&P 500 eked out a 0.2% gain, while the tech-heavy Nasdaq slipped 0.3% as big technology names struggled to maintain momentum, with Nvidia a drag.
Asian markets are mostly positive this morning, with Japan's Nikkei up 0.4%, the Hang Seng up 0.9% in Hong Kong and India' Sensex rising 0.8%, though in China's Shanghai Composite is slightly in the red.