London close: Stocks close higher as investors look to Budget

London stocks had swung back into positive territory by the close on Monday, as investors prepared for a number of upcoming corporate earnings reports and the Autumn Budget.

The FTSE 100 index rose 0.45%, ending the session at 8,285.62 points, while the FTSE 250 edged up 0.07% to end the session at 20,835.10.

In currency markets, sterling was last up 0.12%, trading at $1.2978, while it slipped 0.07% against the euro to change hands at €1.2000.

“Stock markets around the globe benefit from risk on sentiment amid a muted Israeli response to Iran's early October attack,” said IG senior analyst Axel Rudolph.

“Indices begin the week on a positive footing as investors are relieved by Israel's muted retaliatory attack on Iran's military installations, avoiding oil or nuclear facilities.

“The S&P 500 and Nasdaq 100 trade close to their record highs ahead of this week's earnings by five of the ‘magnificent seven’ stocks and key economic data such as the Fed's preferred PCE inflation gauge and US non-farm payrolls.”

Rudolph noted that in the UK, retail sales fell modestly ahead of Wednesday's Autumn Budget.

“Hopes of de-escalation in the Middle East, coupled with easing fears of supply disruptions, provoked a 9% drop in natural gas and near 6% fall in crude oil prices.”

UK business confidence takes a dip ahead of budget

In economic news, UK business confidence dipped to a four-month low as firms braced for chancellor Rachel Reeves' upcoming budget announcement.

According to the Lloyds Business Barometer, confidence dropped to 44% in October, down from 47% in September and 50% during the summer months.

The survey, conducted from 1 to 15 October, suggested that uncertainty surrounding the budget had led to cautious sentiment among business leaders.

Despite the decline, the confidence level remained well above the long-term average of 29%.

Analysts attributed the drop to concerns over potential tax measures, including a rise in employer national insurance contributions, expected in Wednesday’s Autumn Budget.

Lloyds also reported that while 55% of businesses expressed more optimism about the economy compared to three months ago, that was a slight decline from the 57% recorded previously.

The outlook for companies' own trading prospects also softened, with the measure slipping to 53% from 56%.

“Although overall business confidence dipped in October, it follows a sustained period of significant optimism, and business sentiment remains above historical levels," said Hann-Ju Ho, senior economist at Lloyds Commercial Banking.

"Encouragingly, many businesses remain confident in their own trading prospects, and the increase in hiring intentions suggests more employers want to grow their workforce."

Oil plays fall on price moves, travel stocks in the green

On London’s equity markets, oil giants BP and Shell fell sharply, with BP down 1.43% and Shell losing 1.95%.

The declines came as oil prices dropped following Israeli missile strikes on Iran that left its oil infrastructure untouched.

Airlines benefited from the lower oil prices, with easyJet climbing 2.56%, British Airways owner International Airlines Group up 1.8%, and Wizz Air Holdings ascending 4.6%.

Elsewhere, Lloyds Banking Group was down 2.67% and Close Brothers Group plummeted 7.88%.

The declines followed continued fallout from a Court of Appeal ruling requiring greater transparency on commissions by motor dealers acting as credit brokers.

Lloyds said earlier on Monday that it was assessing the ruling's implications, while Close Brothers indicated plans to appeal on Friday.

“Lloyds was in damage control mode on Monday morning after Friday’s ruling on motor finance commission arrangements at the Court of Appeal potentially broadened the scope of the scandal,” said Danni Hewson, head of financial analysis at AJ Bell.

“This will increase nervousness ahead of the FCA’s own probe into the issue and potentially prolong the agony for Lloyds and the other names affected.

“If the regulator does adopt a wider lens thanks to this latest ruling then the results of its investigation may well come in later than May, which was when a judgement had been expected.”

TBC Bank Group and Bank of Georgia Group also faced heavy declines, dropping 9.93% and 5.63% respectively, after Georgia’s ruling party, Georgian Dream - which has ties to Russia - won a contested election over the weekend.

In other moves, Computacenter fell 0.94% after the company downgraded its full-year profit guidance due to a weaker-than-expected end to the third quarter.

On the upside, Trainline surged 9.2% after it raised its full-year growth outlook following a strong first half, with the company now expecting net ticket sales growth between 12% and 14%, up from its previous estimate of 8% to 12%.

Online trading platform Plus500 edged up 0.41%, reporting a rise in third-quarter revenue despite margin pressures.

Melrose Industries saw a modest gain of 0.29% after providing clarity on its accounting for Risk and Revenue Sharing Partnerships (RRSPs).

Healthcare property firm Assura rose 0.2% following its announcement of a secondary listing on the Johannesburg Stock Exchange, aimed at enhancing liquidity and market visibility in South Africa.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 8,285.62 0.45%
FTSE 250 (MCX) 20,835.10 0.07%
techMARK (TASX) 4,743.88 0.07%

FTSE 100 - Risers

Melrose Industries (MRO) 486.60p 9.84%
Pearson (PSON) 1,071.50p 2.73%
easyJet (EZJ) 520.40p 2.72%
Convatec Group (CTEC) 224.00p 2.28%
Halma (HLMA) 2,522.00p 2.15%
Barratt Redrow (BTRW) 482.20p 2.05%
Taylor Wimpey (TW.) 158.00p 2.00%
Persimmon (PSN) 1,605.50p 2.00%
Informa (INF) 836.40p 2.00%
Entain (ENT) 728.40p 1.82%

FTSE 100 - Fallers

Lloyds Banking Group (LLOY) 56.12p -2.67%
Whitbread (WTB) 3,239.00p -1.64%
Smurfit Westrock (DI) (SWR) 3,493.00p -1.47%
BP (BP.) 398.65p -1.43%
Shell (SHEL) 2,516.00p -1.35%
BT Group (BT.A) 142.80p -1.11%
Fresnillo (FRES) 753.00p -0.73%
Coca-Cola HBC AG (CDI) (CCH) 2,756.00p -0.72%
B&M European Value Retail S.A. (DI) (BME) 399.70p -0.60%
Hiscox Limited (DI) (HSX) 1,104.00p -0.54%

FTSE 250 - Risers

Trainline (TRN) 369.20p 9.20%
Wizz Air Holdings (WIZZ) 1,387.00p 4.60%
Carnival (CCL) 1,518.00p 4.22%
Asia Dragon Trust (DGN) 439.00p 3.54%
Bridgepoint Group (Reg S) (BPT) 330.80p 3.44%
Softcat (SCT) 1,765.00p 2.91%
RHI Magnesita N.V. (DI) (RHIM) 3,230.00p 2.70%
Breedon Group (BREE) 442.00p 2.67%
Spectris (SXS) 2,624.00p 2.58%
W.A.G Payment Solutions (WPS) 82.00p 2.50%

FTSE 250 - Fallers

TBC Bank Group (TBCG) 2,585.00p -9.93%
Close Brothers Group (CBG) 254.80p -7.88%
Bank of Georgia Group (BGEO) 3,775.00p -5.63%
Bloomsbury Publishing (BMY) 716.00p -5.04%
Aston Martin Lagonda Global Holdings (AML) 104.40p -4.13%
Abrdn (ABDN) 135.95p -3.58%
Centamin (DI) (CEY) 162.50p -3.22%
Paragon Banking Group (PAG) 720.50p -3.16%
Ithaca Energy (ITH) 103.00p -2.46%
Watches of Switzerland Group (WOSG) 446.80p -2.24%