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London open: Stocks edge down as investors eye Budget
London stocks edged lower in early trade on Monday, with caution in the air ahead of this week’s Budget.
At 0840 GMT, the FTSE 100 was down 0.2% at 7,664.28.
On Wednesday, Chancellor Jeremy Hunt will present the Spring Budget to Parliament at 1230 GMT in what is likely to be the last major economic update before the upcoming general election.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “Speculation over what’s in and what’s out of Jeremy Hunt’s budget is reaching fever pitch, ahead of the big reveal on Wednesday. What appears clear is that the Chancellor has a lot less fiscal room to play with than he hoped, which is why he’s played down speculation about significant tax cuts.
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“Warnings are coming thick and fast, from the Office of Budget Responsibility and the International Monetary Fund, about the financial irresponsibility of offering big sweeteners. Given the huge borrowing commitments the government already has to honour, it seems unlikely there will be a big fanfare of an income tax giveaway. However, a further cut to National Insurance is still on the cards. There is though likely to be a good deal of other tinkering by Houdini Hunt, who is set to show a sleight of hand with an array of smaller moves to try and please the voters ahead of the election.
“The FTSE 100 isn’t expected to make much progress in early trade and the index is still lagging international peers. US stocks have been riding high and Japan’s Nikkei has reached fresh levels, boosted by technology stocks, while the UK’s blue-chip index has failed to regain the high it climbed to just over a year ago. With blue-chip stocks finding it hard to regain their mojo and the swoop on British companies continuing, rumours are swirling that Jeremy Hunt will try and revitalise the London markets, by offering tax incentives to retail investors.
“While and increase to the annual ISA allowance would be hugely welcome, he should steer clear of introducing a ‘British ISA. This would add unnecessary complexity and could have a negative impact on UK investors. Even if such a move did persuade people to invest more in the UK, it could end up increasing risk for investors. It could unnecessarily concentrate portfolios, which could be a detriment, especially if there was more volatility in the London markets compared to others. A separate British ISA might end up providing no additional boost to UK investment. Those who already max out their £20,000 ISA allowance could simply hive off all their existing UK holdings to the British ISA, and use the extra wiggle room to invest more overseas in their usual ISA.”
In equity markets, shipping broker Clarksons was in the black as it posted record full-year profits, with revenue driven by strong growth in its broking, support and research divisions.
Senior edged higher as the aerospace engineer and Boeing supplier reported a jump in 2023 profits and said it had been asked to maintain supply levels of parts for the US plane maker’s B737-Max aircraft.
On the downside, Hipgnosis tumbled as the value of its music portfolio was cut by more than a quarter and the company said it would need to use free cash to pay down debt.
Aviva nudged lower after saying it had made its first foray into the Lloyd’s insurance market with the £242m purchase of underwriting syndicate Probitas.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Fresnillo Plc | +2.46% | +11.40 | 475.00 |
| 2 |  |
Bt Group Plc | +1.19% | +1.25 | 105.90 |
| 3 |  |
Melrose Industries Plc | +1.09% | +6.80 | 632.60 |
| 4 |  |
Bae Systems Plc | +1.04% | +13.00 | 1,263.00 |
| 5 |  |
Compass Group Plc | +1.02% | +22.00 | 2,189.00 |
| 6 |  |
Bp Plc | +0.89% | +4.20 | 475.85 |
| 7 |  |
Rolls-royce Holdings Plc | +0.88% | +3.30 | 378.10 |
| 8 |  |
Hargreaves Lansdown Plc | +0.70% | +5.20 | 743.40 |
| 9 |  |
Direct Line Insurance Group Plc | +0.63% | +1.30 | 209.00 |
| 10 |  |
Gsk Plc | +0.54% | +9.00 | 1,670.80 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Itv Plc | -4.97% | -3.18 | 60.78 |
| 2 |  |
Ocado Group Plc | -4.94% | -23.50 | 452.50 |
| 3 |  |
Rightmove Plc | -3.07% | -17.40 | 548.80 |
| 4 |  |
Tui Ag | -2.45% | -13.50 | 537.00 |
| 5 |  |
Burberry Group Plc | -2.33% | -30.00 | 1,257.00 |
| 6 |  |
Mondi Plc | -2.30% | -32.50 | 1,379.50 |
| 7 |  |
Kingfisher Plc | -1.76% | -4.10 | 228.30 |
| 8 |  |
Taylor Wimpey Plc | -1.64% | -2.30 | 137.90 |
| 9 |  |
Croda International Plc | -1.55% | -76.00 | 4,822.00 |
| 10 |  |
Hiscox Ltd | -1.48% | -17.00 | 1,133.00 |
Monday newspaper round-up: Regional divide, retailers, NatWest, Pfizer
Britain’s sharp regional divide is on track to deepen with London’s economy pulling further ahead despite the government’s levelling up promises, according to a report. Ahead of Chancellor Jeremy Hunt’s budget on Wednesday, the accountancy firm EY said it was forecasting stronger economic growth in London and the wider south-east of England than for the rest of the country. – Guardian
Retailers are suffering from the longest slump in sales since the pandemic, as shoppers cut back for the fifth successive month. New figures from BDO show that sales across fashion, homewares and lifestyle dipped by 1.3pc in February, as the consultancy firm warned of an “almost unprecedented” downturn. Sales in the fashion sector were hit the hardest, BDO said, as sales dropped 8.2pc compared to last year. – Telegraph
Around four in 10 staff at the Bank of England do not feel free to speak their mind without fear of “negative consequences”, according to a survey of workers. Hesitancy among employees on Threadneedle Street has emerged as officials seek to improve compliance at the Bank, as a survey shows that openness among workers is lower than other public sector bodies. A Whitehall survey of civil servants found that more than three-quarters of staff felt they could talk openly, according to the National Audit Office (NAO), well above the Bank’s 59pc. – Telegraph
The Treasury is planning an institutional offer of NatWest shares to sit alongside the “Tell Sid” style retail sale in spite of the lessons of the botched twin-track privatisation of Royal Mail in 2013. Officials are understood to have asked the advisers on the share sale to plan for a parallel offer to large institutional investors in order to maximise proceeds to the Exchequer. A share placing to institutions could significantly boost the size of the overall offer but risks creating tension between institutional buyers of shares and retail applicants. – The Times
Pfizer is the latest blue-chip American company to be accused of betraying its former employees in Britain by failing to lift their pensions in line with inflation. About 4,800 UK former and existing employees, including scientists who developed the bestselling erectile dysfunction drug, Viagra, in the 1990s, have been disadvantaged as their fixed pensions get eroded by the rising cost of living. – The Times
