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.

"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. As a result, it does not plan to begin paying dividends again "for the foreseeable future".

therefore, does not intend to recommence paying dividends for the foreseeable future.

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.

Market Movers

FTSE 100 (UKX) 7,664.28 -0.24%
FTSE 250 (MCX) 19,328.07 -0.14%
techMARK (TASX) 4,389.15 0.27%

FTSE 100 - Risers

Fresnillo (FRES) 474.40p 2.33%
Endeavour Mining (EDV) 1,346.00p 1.66%
BT Group (BT.A) 106.00p 1.29%
BP (BP.) 477.60p 1.26%
Compass Group (CPG) 2,191.00p 1.11%
IMI (IMI) 1,740.00p 0.81%
Smith (DS) (SMDS) 329.00p 0.80%
Antofagasta (ANTO) 1,830.00p 0.72%
Ashtead Group (AHT) 5,758.00p 0.63%
Reckitt Benckiser Group (RKT) 5,176.00p 0.62%

FTSE 100 - Fallers

Ocado Group (OCDO) 463.90p -2.54%
Rightmove (RMV) 554.60p -2.05%
Burberry Group (BRBY) 1,261.50p -1.98%
Mondi (MNDI) 1,389.50p -1.59%
Beazley (BEZ) 656.50p -1.43%
Frasers Group (FRAS) 802.50p -1.35%
Auto Trader Group (AUTO) 738.60p -1.18%
Diploma (DPLM) 3,444.00p -1.09%
Entain (ENT) 906.80p -1.09%
Barclays (BARC) 167.78p -1.03%

FTSE 250 - Risers

Oxford Instruments (OXIG) 2,365.00p 6.77%
Petershill Partners (PHLL) 182.80p 4.46%
NCC Group (NCC) 128.80p 3.37%
Senior (SNR) 164.20p 2.88%
Centamin (DI) (CEY) 95.75p 2.52%
Bank of Georgia Group (BGEO) 5,110.00p 1.79%
Man Group (EMG) 250.00p 1.79%
OSB Group (OSB) 441.40p 1.75%
Helios Towers (HTWS) 77.90p 1.56%
Diversified Energy Company (DEC) 971.50p 1.52%

FTSE 250 - Fallers

Hipgnosis Songs Fund Limited NPV (SONG) 57.00p -9.67%
Indivior (INDV) 1,647.00p -6.63%
Aston Martin Lagonda Global Holdings (AML) 167.10p -5.43%
Quilter (QLT) 101.80p -4.50%
W.A.G Payment Solutions (WPS) 75.20p -3.59%
ITV (ITV) 62.10p -2.91%
Close Brothers Group (CBG) 374.20p -2.25%
The Global Smaller Companies Trust (GSCT) 148.00p -1.73%
Impax Environmental Markets (IEM) 386.50p -1.65%
TUI AG Reg Shs (DI) (TUI) 542.00p -1.54%