- FTSE 100 rises 74 points to 9,609
- Banks rise on report they will avoid extra Budget taxes
- Beazley and Intertek biggest fallers after updates
- Kingfisher climbs after raising profit guidance
4.55pm: FTSE gains
The FTSE 100 rallied to end Tuesday’s session up 74 points at 9,609.
Across the Atlantic, a sharp pullback in Nvidia shares amid competition concerns saw the Nasdaq little changed as the S&P 500 and Dow Jones powered higher.
“Nvidia’s dominant position is unlikely to be fundamentally threatened in the short-term, but markets are all about forward expectations, and it certainly seems like Alphabet is poised to snatch market share away from Jensen Huang’s empire,” IG chief market analyst Chris Beauchamp said.
“The news comes after Softbank’s slump overnight on fears that its bet on OpenAI is about to come seriously unstuck, leaving tech indices under pressure even as the Dow, small caps and European markets enjoy a solid day.”
3.50pm: London IPO holiday
The FTSE 100 and its continental European peers are continuing to gain power as US tech stocks ebb lower.
London's blue chips are up 0.8%, as are those in Frankfurt, while in Paris they are promenading 0.9% higher.
Kingfisher is still top of the FTSE leaderboard, up 6.7%, followed by a group of banks, miners, tobacco companies, utilities and housebuilders.
The latest pre-Burgdet rumour is that there will be a stamp duty holiday for London IPOs, removing the 0.5% tax that investors currently have to pay when they buy shares.
This would be a "welcome boost for the UK stock market", says Emma Wall at Hargreaves Lansdown.
"London has been losing out to New York in recent years, as businesses favour the funding and regulatory environment of the NYSE. But if this Budget rumour proves accurate, it may be the carrot British businesses need to plump for a domestic listing."
2.45pm: Nvidia and semi firms slide in New York
It's an uneven start in New York.
While the Dow Jones has started up 0.35%, the S&P 500 is down 0.2% and the Nasdaq has dropped 0.7%.
AMD is down 8%, Nvidia has dropped 5%, Super Micro Computer 5%, Oracle 4.3%, Coinbase 3%.
Microsoft and Amazon are flat, while Apple, Alphabet, Broadcom, Meta are all higher.
1.29pm: Cash ISA limit to be cut, adding to gold demand
Reports suggest Rachel Reeves will cut the annual cash ISA limit to £12,000.
HMRC says around 15 million adult ISAs were subscribed to in 2023/24 – just under 10 million of which were cash ISAs.
Investment platforms of course think the reasonin behind this move is a good idea, as it is designed to push more people to invest in shares.
So while Sarah Coles, head of personal finance at Hargreaves Lansdown, says "we need an investment culture in the UK, and some of the money that has been saved in cash ISAs would work harder for people if it was invested instead," she adds that "there’s no evidence that cutting the cash ISA allowance would encourage them to make the change".
When HL surveyed its clients to find out what they would do in the event of a cut, "they were equally likely to say a cut in the allowance would mean saving elsewhere as they were to say they would invest instead", reports Coles.
"There will be those who should be investing instead, but the gamechanger here will be changes in the pipeline to allow businesses to provide more targeted support and give people the help they need to take advantage of the enormous growth potential of investment. It’s the carrot that’s going to be effective here: not the stick."
HL has found that clients often begin by opening a cash ISA, and then later transfer this money into a stocks and shares ISA.
Paul Williams, managing director of Solomon Global, a supplier of gold and silver bars and coins, says Reeves’ decision "could force millions to reconsider how they protect and grow their long-term wealth, and will likely encourage more people to look for alternative tax-efficient areas, gold being one".
"Channelling people towards assets they may neither trust nor fully understand, could see many more turning to traditional safe havens and time-tested stores of value."
He says his firm has seen "a clear shift in investor behaviour", with sales of CGT-exempt gold surging ahead of the Budget, with 46% of visitors to its site "now exploring gold bullion coins specifically because of their tax-free status.
"Unlike ISAs, whose rules can be rewritten at the Government’s whim, the tax treatment of UK legal-tender bullion coins has remained consistently favourable."
1.03pm: Drinks sugar tax to be extended
The sugar tax will be applied to a wider range of soft drinks, as well as milkshakes, health secretary Wes Streeting has announced, part of plans to fight obesity.
Shares in Irn Bru maker AG Barr are little moved.
Streeting said the level at which the sugar tax is imposed is being lowered and the levy is also being extended to cover milkshakes, pre-packaged coffees and other milk-based drinks.
The Tories introduced the sugar tax in 2016 on drinks with a sugar content of 5g per 100ml, which led to many brands reformulating products to avoid the tax.
The limit will now be lowered to 4.5g.
12.16pm: Market mood improves
The FTSE 100 and the broader European market has seen sentiment improve, with US futures cutting losses too.
It's not clear why. Maybe some US traders waking up.
US retail sales will "determine where stocks go next", says market analyst Kathleen Brooks at XTB.
"The US stock market recovery has paused as we wait for key US retail data that is due later this afternoon."
A 0.4% rise for September is expected for headline sales, and 0.3% for core sales, which is a touch lower than the August reading, "but", says Brooks, "it would still suggest that the US consumer maintained upside momentum as we ended Q3".
"Although this data is old at this stage, it could still rock markets today as the delayed impact from the government shutdown catches up with markets.
"Due to this, if retail sales are stronger than expected, this could weigh on stocks and risky assets as it may reduce expectations for a Fed rate cut next month."
Brooks notes that there was some "clear divergence" within the Magnificent 7 that has widened so far this month, with Google breaking away from the pack.
Yesterday, Tesla and Alphabet were both higher by more than 6%, but Nvidia was a laggard, with the Nasdaq led higher by Broadcom's 11% surge.
Nvidia is down 3.5% in pre-market trading this morning, having started a decline last night when Meta announced that it would buy chips from Alphabet.
After a 12-fold gain over the past five years, despite Nvidia's stunning earnings last week, Brooks says "there could be more weakness to come".
Alphabet, with shares up more than 22% in the past month, has seen a confluence of positive factors: Warren Buffet announced a stake, record-breaking Q3 results, and its emergence as "the ultimate AI hybrid", says Brooks, "it is both a hyperscaler, creating AI software and products for its customers, and it is now a chip producer for the hyperscalers, who are spending hundreds of billions on their AI infrastructure build outs".
11.19am: Retail mood remains gloomy
The retail industry mood worsened at the sharpest rate in 17 years, as worries about the Budget, inflamed by Downing Street leaks and UK-turns, as well as fierce industry scare stories and other lobbying, led to a growing share of firms expecting their business situation to deteriorate over the coming quarter.
This is according to the CBI’s latest quarterly Distributive Trades Survey.
The retail sales volumes, the weighted balance worsened to -32% from -27%, but are expected to improve in December -24%.
By seasonal standards, November’s retail sales were judged to be “poor” (-25%), down from October (-15%), with December’s also set to disappoint seasonal norms (-18%).
Retailers expect to reduce capital expenditure over the next 12 months to the same degree as reported in August (-42%).
On inflation, retail selling price inflation fell closer to its long-run average in the year to November (+46%), slowing from a much faster rate in August (+65%) as the trend of accelerating price inflation, as found in other national data, seems to have passed a turning point.
Alpesh Paleja, deputy chief economist at the CBI, said: "Retailers continue to grapple with a long spell of weak demand, as households remain cautious around day-to-day spending.
"With all eyes on the forthcoming Budget, uncertainty in the run-up has meant that businesses are holding back on plans for investment and hiring."
He calls for the Chancellor to "avoid pulling the business tax lever once again, at risk of further curtailing firms’ efforts to build a more resilient, dynamic economy".
10.46am: Small cap news
Shares in RC Fornax PLC (AIM:RCFX), which was the first London IPO this year, shot up 11% after it won its first major UK public sector tender, taking charge of a consortium and could open doors to more work in the space sector.
Alphawave IP Group PLC (LSE:AWE) rose 6% after the semiconductor group and Qualcomm confirmed that several major regulatory approvals for its £1.8 billion recommended takeover have now been secured.
CelLBxHealth PLC (AIM:CLBX) plans to raise £6.8 million as it shifts from research to commercial sales, with the fundraise and restructuring aiming to extend its cash runway to late 2027 and a move toward EBITDA breakeven.
First Tin PLC (LSE:1SN) dropped after it got a £6.3 million fundraising away to accelerate work in Australia and Germany.
And the largest was Aquis-listed Valereum PLC (AQSE:VLRM), which entered into a binding agreement to raise $200 million of asset-backed funding, described as royalty and streaming capital.
Shares in Vast Resources PLC (AIM:VAST) climbed 6% after the company reported what it said were "promising results" from its first diamond tender.
Caledonia Mining Corporation PLC (AIM:CMCL) has approved development of the Bilboes gold project in Zimbabwe after completing its feasibility study. The mine is expected to produce 200,000 ounces a year from 2029 with strong project economics.
Cordiant Digital Infrastructure Ltd (LSE:CORD) reported higher earnings and a rising NAV for the first half of its financial year, as projects progressed such as expansion work at its European data centres and the completion of Speed Fibre’s acquisition of BT Ireland’s wholesale and enterprise business.
10.20am: Compass points down, surprising analyst
Compass shares are down 2.65% despite revenues and underlying profits beating consensus forecasts.
Organic revenue growth was 8.7% versus consensus at 8.3%, while underlying operating profit was $3.335 billion versus consensus at $3.309 billion, says UBS analyst Ivar Billfalk-Kelly.
A full-year dividend of 65.9c was proposed, of which 22.6c was already announced at the interims.
The UBS analyst says he expected the shares to react "positively", as the "strong end to the year is a clear positive and while the guidance for organic revenue growth for FY26 is in line with expectations, the growth in profitability is ahead.
"We also believe this needs to be viewed though the lens of the past four years in which the company has consistently outperformed initial guidance."
9.51am: Markets dip into red
Markets are all red now, although only slightly.
The FTSE 100 is down a small handful of points, as are mainland European counterparts, with the DAX and CAC indices in Frankfurt and Paris down around 0.1%.
US futures too, with the tech-heavy Nasdaq is pointing to a decline of 0.45%, while the S&P and Dow Jones are down 0.25% and 0.15%.
"Hot money is still skittish," says market analyst Neil Wilson at Saxo, pointing to record outflows for bitcoin.
According to FactSet, the iShares Bitcoin Trust ETF has seen a record $2.2 billion outflow this month, eight times more than it saw in October, though the bitcoin dollar price has recovered from Friday's eight-month lows around $80k to $87k this morning as it has ridden on the "risk relief rally".
Part of the reason for the rally on Monday "was the Fed put", says Wilson, as more dovish comments from Fed officials nudged markets closer to believing a December rate cut is happening, with the chances of a reduction in the Fed funds rate next month moving to 80% after seeming almost off the table only a few days earlier.
"There is a lot of noise and a lot of volatility around this, which seems a little odd considering I think next year we get new Fed chair to run it hot anyway."
As for the UK, market positioning is "pointing to a sizeable downside move in sterling following tomorrow’s Budget", Wilson adds.
GBP/USD is continuing its steady climb to 1.313 and heightened volatilty is being seen in the pound around the event. "Watch out," he warns.
"If we see a sharp move up in gilt yields – say because the market doesn’t believe that spending restraint pencilled in for the end of the parliament is possible – this could precipitate a negative feedback to sterling as markets would price in political uncertainty re the leadership and inevitably start to fret over a more left-leaning govt and endless tax-and-spend.
"Remember, Reeves has hung her hat on the bond market – her future is in the hands of the bond vigilantes."
9.14am: Beazley drops, Marston's fizzes higher
Beazley PLC (LSE:BEZ) shares have dropped almost 11% after the Lloyd’s of London insurer reported slower premium growth than anticipated for the third quarter, with rates declining 4%, but guidance for its combined operating ratio has improved following a benign hurricane season.
Analyst Andreas Van Embden at Peel Hunt notes that Beazley has announced that it is making a major $500 million investment in building up a Bermuda platform to expand into the insurance-linked securities (ILS or third-party capital) market.
"This puts into question the possible size of the special dividend at year-end following the buildout of excess capital in 2025."
Beazley will be holding a CMD this afternoon where further details around deploying capital into Bermuda will be discussed as well as the cycle management strategy in 2026 and beyond, he notes.
Elsewhere, shares in Marston’s PLC (LSE:MARS) have fizzed up almost 9% to their highest level in over three years after the pubco posted a second consecutive year of significant profit growth and margin expansion.
Management said growth was helped by investment into 31 new pub format conversions during the year, delivering average revenue uplifts of 23%, and wider estate upgrades.
Analyst Anna Barnfather at house broker Panmure Liberum says the PBT growth of 71.3% was slightly ahead of recently upgraded forecasts, driven by LFL growth of 1.6% and 140bps margin improvement, "underlining the benefits of its flexible operating model and success of its focus on more profitable sales mix and cost management initiatives".
"This step-change in profitability has driven recurring FCF above £50m, ahead of schedule. In turn, this enables management to accelerate reinvestment across its five pub formats while continuing to deleverage with cash returns to shareholders now firmly on the horizon."
8.37am: Banks, miners, US data and Budget in focus
A subdued session might be expected "as the UK braces for one of the most hotly anticipated Downing Street Budgets in recent history", says Derren Nathan, head of equity research at Hargreaves Lansdown.
"If rumours of an imminent cut to the medium-term growth outlook by the Office for Budget Responsibility prove to be true, that makes the delicate balancing act of fiscal prudence and stimulating the economy more precarious than ever."
But so far, a tax escape for banks and an encouraging update from DIY retailer Kingfisher are helping lift the FTSE.
Kingfisher raised its guidance despite softening market conditions in the UK, where it remains mindful of inflation and tomorrow’s Budget.
More retail concerns are likely to be raised in the CBI Distributive Trades survey at 11am, adding to the chorus of wailing/lobbying from the industry ahead of Rachel Reeves' speech tomorrow.
Nathan mentions that traders' attention will later turn to key economic data releases before traders start to wind down ahead of Thursday’s Thanksgiving pause.
"Markets will be looking for further reassurance that the soft-landing narrative isn’t gravitating in the direction of stagflation. But the public numbers coming out today are more backward looking than usual, delayed by the earlier US government shutdown.!
On the inflation side, September’s US producer price index is expected to have notched up a 0.3% increase after falling back 0.1% in August, while US retail sales growth in September is expected to have slowed from 0.6% to 0.4%.
"The Conference Board’s consumer confidence index (a drop of 1.1 points to 94.6 expected) will be a more relevant number as retailers start the countdown to Christmas".
Brent crude oil prices are back down below $63 per barrel this morning, "erasing some of yesterday’s gains as tentative hopes for a Russia-Ukraine peace deal emerge, raising the prospect of a lift on Russian sanctions in an already oversupplied market, a theme that’s overshadowing rising expectations of a US rate cut", says Nathan. Shell and BP shares are higher, up 0.96% and 0.3%.
Gas prices are down 3%, gold and silver very slightly lower, copper up 0.9%. Big miners are mostly higher, with Antofagasta and Anglo American up 2.8% and 1.5%.
8.15am: Kingfisher and banks lead FTSE higher at open
The FTSE 100 has defied the futures market and opened higher, up 12 points to 9,547.
Topping the early risers is Kingfisher PLC (LSE:KGF), up 5.4%.
Banks are next, with Barclays, Lloyds and NatWest all up over 2.5% on reports that they will escape extra taxes in tomorrow's Budget.
7.50am: Next tops up dividend after selling land
Next PLC (LSE:NXT) has sold some "non-operational" land at Waltham Abbey, Essex, drumming up £54.1 million in net cash that will go into shareholders' pockets via an increased dividend.
The transaction, which also resulted in an exceptional profit of £16.3 million, is expected to increase its previously indicated special dividend by 45p.
7.32am: easyJet lands with profit beat
Full-year profits from easyJet PLC (LSE:EZJ) rose more than City analysts expected in the past year, as a decline in revenue per kilometre flown was arrested.
The FTSE 100-listed group reported an 18% increase in underlying profit on an EBIT basis to £703 million, above the £669.4 million analyst consensus from LSEG.
Out of total PBT, the airline contributed £415 million, while the holidays division delivered £250 million, which hit the board's medium-term goal ahead of schedule.
As a result, a new 2030 target of £450 million holidays profit has been set.
7.16am: FTSE 100 called lower despite positive mood on Wall Street
The FTSE 100 has been called lower ahead of Tuesday's open, although there is a smattering of corporate results from the likes of easyJet, Kingfisher, Next and Compass that could change the mood.
On the futures market, the London benchmark was called 17 points lower, adding to the decline of 4.8 points at the start of the week that left the index at 9,534.91.
US futures are also in the red after jumping overnight, with tech stocks powering the rally, seemingly reflecting renewed optimism around artificial intelligence, while traders were also buoyed by growing hopes of another Federal Reserve interest rate cut at the meeting next month.
The Nasdaq soared 2.7%, the S&P 500 climbed 1.6% and the Dow Jones rose a more modest 0.4%, while the Russell 2000 jumped 1.9%.
On Monday, Fed Governor Christopher Waller joined New York Fed President John Williams in signalling that a rate cut next month is possible, reinforcing investor expectations for looser monetary policy.
Asian stocks are mixed: Japan's Nikkei and India's Sensex are both just above flat, the Hang Seng is up 0.3%, the Shanghai Composite up 0.9%, but some other markets are in the red.