London close: Stocks mixed as investors digest Autumn Statement

London markets closed with a mixed performance on Wednesday, influenced by the Chancellor’s Autumn Statement and big moves from the likes of Sage and Kingfisher.

Earlier in the afternoon, Jeremy Hunt unveiled a series of initiatives aimed at stimulating business investment and economic growth and encompassing reductions in business taxes and National Insurance.

The FTSE 100 index saw a slight decline of 0.17%, ending the day at 7,469.51 points, while the FTSE 250 recorded an uptick of 0.72%, reaching 18,480.17.

On the currency front, sterling was last down 0.5% on the dollar, trading at $1.2476, while it saw a minor dip of 0.16% against the euro to change hands at €1.1474.

“FTSE 100 constituent Sage isn’t normally known for exciting moves in its price, but today’s surge on buyback news shows UK investors are keen to invest in quality,” said IG chief market analyst Chris Beauchamp.

“At the other end of the scale, Kingfisher has resumed its losing ways, falling sharply following this morning’s profit warning.

“Maybe the chancellor’s largesse at the Autumn Statement, giving consumers a reduction in NI payments, will mean some extra spending heads towards Kingfisher - the share price could certainly do with some propping up.”

Chancellor takes wraps of package of 110 measures

In the Chancellor’s Autumn Statement delivered in the early afternoon, Jeremy Hunt unveiled a series of measures to bolster business investment and economic growth in the UK.

The measures included significant cuts to business taxes and National Insurance.

Hunt, citing the Office for Budget Responsibility (OBR), shared that the UK economy was expected to grow by 0.6% this year, 0.7% in 2024, and 1.4% in 2025, with a target of reaching an annual growth rate of 2% by 2027.

Those projections differed from the OBR’s earlier forecasts, which anticipated a 0.2% economic decline in 2023 but more robust growth in subsequent years.

The OBR revised its forecasts due to extended inflationary pressures.

Hunt emphasised that despite challenges like the global pandemic and energy crisis, the UK had managed to avoid a recession, but he acknowledged that more work remained.

To stimulate economic growth, Hunt introduced a package of 110 measures, focusing on unlocking supply-side reforms and enhancing business investment by £20bn annually.

The centrepiece of the measures was the permanent implementation of ‘full expensing’, initially introduced as a temporary measure in 2021, allowing companies to reduce their tax liabilities by up to 25p for every £1 spent on plant and machinery.

That change, costing £11bn per year, was touted as the “largest business tax cut in modern British history” by Hunt, with the OBR projecting a £3bn increase in business investment annually.

National Insurance contributions also underwent an overhaul, with the 12% rate reduced to 10% effective from 6 January and the abolition of Class 2 contributions paid by the self-employed.

Additional measures included streamlining the planning process for infrastructure projects and extending the 75% business rates discount for hospitality, retail, and leisure businesses for another year at a cost of £4.3bn.

Hunt also committed to an 8.5% increase in the pension to £221.20 per week and announced benefits would rise in line with a September inflation rate of 6.7% rather than October’s 4.6%.

UK manufacturing shows sharp decline

In economic news, manufacturing industry data from the Confederation of British Industry (CBI) revealed a sharp decline in output volumes in November.

The three-month balance stood at -17, down from October’s -6, with ten of the 17 sub-sectors, including chemicals, mechanical engineering, and metal manufacture, experiencing reduced output.

The CBI also forecasted further output declines into 2024.

Additionally, total order books were reported below normal for the season, with a balance of -35 compared to the previous month’s -26.

Shifting across the Atlantic, the US job market showed unexpected tightening as initial unemployment claims dropped by 24,000 to 209,000 in the week ended 18 November.

The four-week moving average also decreased by 750 to 220,000.

Meanwhile, American consumer confidence in the economy dipped in November, though sentiment regarding personal finances improved.

Concerns about rising inflation persisted, as reflected in the University of Michigan’s consumer confidence index, which declined from 63.8 in October to 61.3.

Sage Group jumps on first-half figures, Kingfisher sinks

On London’s equity markets, Sage Group surged 14.29% after it reported an impressive 18% increase in full-year underlying operating profit.

Sage also announced an uplifted dividend and disclosed a share buyback programme of up to £350m.

Johnson Matthey gained 4.44% after it raised its outlook for full-year underlying operating performance.

The positive news came despite a dip in first-half sales and profit, primarily attributed to lower precious metal market prices.

JD Sports Fashion continued its upward trajectory with a 4.15% increase on the back of the boost it received on Tuesday when its US peer, Dick’s Sporting Goods, raised its outlook.

Breedon Group climbed 1.64% after the construction materials company celebrated a “strong” performance in the year's first ten months.

The firm also expressed optimism that its full-year outlook was surpassing expectations.

LXi REIT recorded a 1.16% rise after it confirmed that it was currently under offer and in solicitors’ hands regarding the potential sale of 66 Travelodge hotels, responding to press speculation.

Rotork managed a modest gain of 0.07% after the flow controls specialist reiterated its guidance for the full year, with group order intake up nearly 10% in the ten months leading up to October.

Grainger was ahead 3.47% after the residential landlord celebrated a 7.7% jump in annual rental income, driven by robust property demand.

On the downside, Kingfisher tumbled 6.98% after the owner of B&Q and Castorama reduced its profit guidance for the second time due to ongoing market weakness in France.

Kingfisher now expected adjusted pre-tax profit for the year ending January 2024 to be around £560m, compared to £758m a year earlier.

HSBC Holdings slipped 0.13% after RBC Capital Markets downgraded its shares from ‘outperform’ to ‘sector perform.’

Genus saw a 2.46% decline after the animal genetics firm reported a challenging start to the year, with adjusted operating profits down during the first five months of its fiscal year for its ABS division.

Drinks company Britvic slipped 0.12% after underwhelming investors with a 5.9% increase in full-year adjusted EBIT.

Bodycote fell 2.36% after the heat treatments firm reported that weaknesses in emerging markets constrained year-to-date revenue growth.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 7,469.51 -0.17%
FTSE 250 (MCX) 18,480.17 0.72%
techMARK (TASX) 4,121.75 0.78%

FTSE 100 - Risers

Sage Group (SGE) 1,130.00p 13.32%
Entain (ENT) 880.80p 5.92%
JD Sports Fashion (JD.) 150.35p 3.98%
BT Group (BT.A) 122.45p 3.73%
Halma (HLMA) 2,123.00p 2.17%
International Consolidated Airlines Group SA (CDI) (IAG) 158.80p 2.16%
London Stock Exchange Group (LSEG) 8,868.00p 2.14%
Smurfit Kappa Group (CDI) (SKG) 2,712.00p 1.57%
RS Group (RS1) 759.60p 1.50%
InterContinental Hotels Group (IHG) 6,254.00p 1.49%

FTSE 100 - Fallers

Kingfisher (KGF) 214.50p -6.98%
Rolls-Royce Holdings (RR.) 237.50p -2.26%
BP (BP.) 466.15p -2.18%
Shell (SHEL) 2,556.50p -2.16%
Glencore (GLEN) 448.95p -1.76%
NATWEST GROUP (NWG) 204.50p -1.35%
Rentokil Initial (RTO) 456.00p -1.34%
Taylor Wimpey (TW.) 126.15p -1.29%
Barclays (BARC) 139.98p -1.23%
Centrica (CNA) 146.45p -1.08%

FTSE 250 - Risers

Johnson Matthey (JMAT) 1,532.50p 5.04%
Telecom Plus (TEP) 1,648.00p 4.17%
HGCapital Trust (HGT) 407.50p 3.69%
Sirius Real Estate Ltd. (SRE) 89.40p 3.65%
Cranswick (CWK) 3,846.00p 3.61%
Helios Towers (HTWS) 74.50p 3.54%
Grainger (GRI) 262.60p 3.47%
Big Yellow Group (BYG) 1,092.00p 3.41%
Auction Technology Group (ATG) 638.00p 3.40%
C&C Group (CDI) (CCR) 140.00p 3.09%

FTSE 250 - Fallers

Ceres Power Holdings (CWR) 200.40p -4.21%
Crest Nicholson Holdings (CRST) 177.40p -4.16%
Harbour Energy (HBR) 219.50p -2.75%
Bodycote (BOY) 578.00p -2.61%
Genus (GNS) 2,060.00p -2.46%
Vistry Group (VTY) 797.50p -1.73%
Diversified Energy Company (DEC) 70.10p -1.61%
Bank of Georgia Group (BGEO) 3,410.00p -1.45%
Virgin Money UK (VMUK) 157.00p -1.32%
Greencoat UK Wind (UKW) 143.00p -1.17%