London close: Stocks finish mixed ahead of Budget next week

London markets closed with mixed results on Friday as caution weighed on investor sentiment, driven by concerns over weakening consumer confidence and the forthcoming Budget.

The FTSE 100 index edged down 0.25% to end at 8,248.84 points, while the FTSE 250 managed a slight gain, rising 0.14% to 20,819.91 points.

In currency markets, sterling was flat against the dollar at $1.2975, but saw a modest increase of 0.18% against the euro, trading at €1.2006.

“Even though positive consumer sentiment and durable goods data pushed most stock indices higher, major European and US indices will nonetheless end the week in the red,” said IG senior analyst Axel Rudolph.

“US durable goods orders fell less than expected, while consumer sentiment reached a six-month high in October, boosting stocks.

“Meanwhile on the other side of the Atlantic German business morale increased for the first time in five months.”

Rudolph added that oil prices were on track for a weekly gain as concerns over a possible Israeli retaliatory missile attack on Iran over the weekend made investors jittery.

“For the same reason the price of gold also remains in positive territory on a daily and weekly basis while trading close to this week's record high.”

UK consumer confidence takes a dip ahead of Budget

On the economic front, UK consumer confidence saw a slight dip in October, with GfK's consumer confidence index slipping one point to -21, underscoring a mixed economic outlook.

While the perception of personal finances and major purchases showed modest improvement, broader economic concerns continued to weigh on sentiment.

The indicator tracking personal finances over the past year fell by one point to -10, though this marked a notable improvement from last year.

Looking ahead, consumers seemed cautiously optimistic, with the index for personal finances over the next year rising one point to -2, six points higher than in October 2023.

However, concerns about the wider economic landscape persisted, as the index for the general economic situation over the past year dropped five points to -42, although still 12 points better than a year ago.

Expectations for the economy in the coming year also softened, dipping one point to -28, slightly above last year’s level.

Despite those concerns, willingness to make major purchases showed resilience, rising two points to -21, a 13-point increase year-on-year.

Additionally, the savings index climbed four points to +27, reflecting stronger sentiment towards saving compared to last October.

“Consumer confidence fell one point this month to -21, taking the score back down to the level last seen in March this year,” said GfK consumer insights director Neil Bellamy.

“Also falling one point are both personal financial situation over the last 12 months and general economic situation over the next 12 months.

“The largest drop though was in our view of the general economic situation over the last 12 months, down five points to -42.”

On the continent, German business sentiment saw its first improvement in six months, as the Ifo Institute's business climate index rose to 86.5 in October, beating forecasts of 85.6.

The assessment of current conditions improved to 85.7, with expectations rising to 87.3, suggesting a more optimistic outlook.

The manufacturing sector, which has weighed heavily on growth in recent quarters, saw "noticeably less pessimistic expectations" from businesses, though challenges like low order volumes and below-average capacity utilisation remain.

Across the Atlantic, consumer sentiment in the United States was relatively steady in October, with the University of Michigan's consumer confidence index ticking up to 70.5 from 70.1, outperforming the forecasted 69.0.

Inflation expectations also edged slightly lower, signalling cautious optimism among U.S. consumers.

NatWest rises on upbeat report, Close Brothers plunges on court ruling

On London’s equity markets, NatWest Group rose 2.35% following an upbeat quarterly report that prompted an upward revision in its full-year income forecasts.

For the third quarter, NatWest reported a 34.6% increase in profit to £1.24bn, up from £924m last year, with total income climbing 7.3% to £3.49bn.

The bank now projected a return on tangible equity above 15%, a one-point increase from prior guidance, and expected adjusted income to reach £14.4bn, above its previous forecast of £14bn.

On the downside, Close Brothers Group plunged 24.51% after the Court of Appeal ruled that motor dealers acting as credit brokers owed a fiduciary duty to customers.

Close Brothers announced it would appeal, but would temporarily halt new UK motor finance business to ensure compliance with the ruling's implications.

Airtel Africa dropped 5.79% as it reported a 9.7% decline in half-year revenue to $2.37bn, hit hard by currency devaluations in several African markets.

The company’s operating profit also fell 20.3% to $706m, adding to investor concerns.

Lloyds Banking Group was down 1.93%, impacted by the same fiduciary duty ruling affecting Close Brothers, as Lloyds also provides motor finance.

Finally, SSE saw a 0.97% decline after Citi downgraded the stock to ‘sell,’ citing concerns over possible delays in its offshore wind projects, which could pressure earnings and returns.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 8,248.84 -0.25%
FTSE 250 (MCX) 20,819.91 0.14%
techMARK (TASX) 4,740.62 -0.13%

FTSE 100 - Risers

Anglo American (AAL) 2,434.50p 4.78%
Scottish Mortgage Inv Trust (SMT) 875.60p 3.13%
Unilever (ULVR) 4,762.00p 2.34%
NATWEST GROUP (NWG) 363.90p 2.13%
London Stock Exchange Group (LSEG) 10,605.00p 2.12%
Relx plc (REL) 3,644.00p 1.53%
Rio Tinto (RIO) 5,022.00p 1.51%
Barclays (BARC) 241.40p 1.36%
Intermediate Capital Group (ICG) 2,114.00p 1.34%
Standard Chartered (STAN) 853.00p 1.28%

FTSE 100 - Fallers

Lloyds Banking Group (LLOY) 57.66p -6.43%
Airtel Africa (AAF) 108.60p -5.15%
SSE (SSE) 1,829.00p -3.36%
Smith & Nephew (SN.) 1,088.00p -3.12%
Barratt Redrow (BTRW) 474.60p -2.64%
Aviva (AV.) 462.60p -2.43%
BAE Systems (BA.) 1,292.00p -2.34%
Reckitt Benckiser Group (RKT) 4,849.00p -2.10%
Bunzl (BNZL) 3,472.00p -2.09%
Admiral Group (ADM) 2,572.00p -2.06%

FTSE 250 - Risers

Softcat (SCT) 1,716.00p 12.01%
Bloomsbury Publishing (BMY) 754.00p 10.56%
Burberry Group (BRBY) 785.40p 10.31%
Indivior (INDV) 699.00p 6.96%
Watches of Switzerland Group (WOSG) 454.00p 5.21%
Harworth Group (HWG) 186.00p 4.49%
Kainos Group (KNOS) 829.00p 4.15%
Dr. Martens (DOCS) 56.95p 3.83%
BlackRock Smaller Companies Trust (BRSC) 1,448.00p 3.28%
Allianz Technology Trust (ATT) 378.50p 3.27%

FTSE 250 - Fallers

Close Brothers Group (CBG) 276.60p -24.96%
Abrdn (ABDN) 141.00p -14.00%
Travis Perkins (TPK) 858.00p -6.94%
Pennon Group (PNN) 564.50p -4.81%
Wetherspoon (J.D.) (JDW) 672.00p -4.75%
Jupiter Fund Management (JUP) 80.10p -4.19%
Kier Group (KIE) 143.20p -4.15%
Inchcape (INCH) 731.00p -4.13%
Morgan Sindall Group (MGNS) 3,815.00p -3.54%
PureTech Health (PRTC) 151.20p -3.45%