London open: Stocks edge up ahead of Autumn Statement

London stocks rose in early trade on Wednesday, but gains were muted as investors eyed the Autumn Statement.

At 0820 GMT, the FTSE 100 was up 0.2% at 7,499.76.

Chancellor Jeremey Hunt is due to deliver his statement at around 1230 GMT, after Prime Minister’s Questions.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: "Investors will be highly attuned to what the Chancellor plans as part of that recipe and tax cuts now look set to be a key ingredient, even though they risk turning up the heat on inflation.

"With borrowing this fiscal year coming around £17 billion under forecasts, cuts to national insurance are now mooted. This tax has been all over the place in recent years, with a hike followed by cuts in rapid succession. A further cut, if it comes, will make a difference to the money in people’s pockets. But increasing spending power also ups the inflationary risks just as the Bank of England is warning about the stubborn nature of the price spiral.

"The other tax rabbit which looks set to be pulled out of the chancellor’s hat is for full expensing for businesses to be made permanent. This was a temporary measure brought in allowing firms to set 100% of their capital expenditure off against tax immediately. If it is, as rumoured made permanent it should not only help with immediate cash flow but also enable businesses to make commitments stretching far further into the future, particularly given the imminent hike in corporation tax.

"A shake up in ISAs, the tax wrappers of savings and stocks and shares investments, would also be highly welcome with a big consultation expected to be launched. This should provide a boost for UK-listed companies and a potential reboot for London. Ministers are keen to clearly want to inject a big dose of energy into the City, but just how it’s approached could make all the difference. A rise in the ISA allowance level in line with inflation, would be an effective shot in the arm for retail investors, especially those hit by cuts in the allowances for dividends and capital gains tax."

In equity markets, Johnson Matthey gained as it raised the outlook for its full-year underlying operating performance despite posting a drop in first-half sales and profit due to lower precious metal market prices.

Sage Group rallied as it reported an 18% jump in full-year underlying operating profit, lifted its dividend and announced a share buyback programme of up to £350m.

Construction materials group Breedon was in the black as it hailed a "strong" performance in the 10 months to the end of October and said the outlook for the full year was ahead of expectations.

On the downside, B&Q and Castorama owner Kingfisher slumped as it cut its profit guidance for the second time owing to continued market weakness in France.

The company, which also owns Screwfix in the UK and a host of other DIY brands across Europe, said adjusted pre-tax profit for the year ending January 2024 will now come in at around £560m, compared with £758m the year before. In September, the company had slashed its guidance from £634m to £590m.

Severn Trent lost ground as it posted a decline in interim profit but backed its full-year expectations.

HSBC was also weaker after RBC Capital Markets downgraded the shares to 'sector perform' from 'outperform'. "HSBC has outperformed UK bank peers by 31% YTD, however, we think that now is a good time to take profits," it said.

"Earnings momentum looks to have turned and an improved capital distribution profile is now reflected in consensus."

Market Movers

FTSE 100 (UKX) 7,499.76 0.24%
FTSE 250 (MCX) 18,368.09 0.11%
techMARK (TASX) 4,103.08 0.32%

FTSE 100 - Risers

Sage Group (SGE) 1,056.50p 5.95%
JD Sports Fashion (JD.) 147.45p 1.97%
Ashtead Group (AHT) 4,786.00p 1.66%
Diploma (DPLM) 3,374.00p 1.63%
DCC (CDI) (DCC) 5,394.00p 1.43%
Burberry Group (BRBY) 1,564.00p 1.20%
Auto Trader Group (AUTO) 713.20p 1.16%
BT Group (BT.A) 119.40p 1.14%
Flutter Entertainment (CDI) (FLTR) 12,915.00p 1.10%
CRH (CDI) (CRH) 4,918.00p 0.92%

FTSE 100 - Fallers

Severn Trent (SVT) 2,618.00p -1.24%
Smurfit Kappa Group (CDI) (SKG) 2,644.00p -0.97%
Schroders (SDR) 397.10p -0.63%
HSBC Holdings (HSBA) 610.20p -0.51%
Marks & Spencer Group (MKS) 251.10p -0.48%
Standard Chartered (STAN) 659.20p -0.42%
Hikma Pharmaceuticals (HIK) 1,751.00p -0.37%
GSK (GSK) 1,412.80p -0.32%
Pershing Square Holdings Ltd NPV (PSH) 3,104.00p -0.26%
AstraZeneca (AZN) 10,170.00p -0.22%

FTSE 250 - Risers

Close Brothers Group (CBG) 779.00p 2.43%
Big Yellow Group (BYG) 1,081.00p 2.37%
Ninety One (N91) 185.00p 2.32%
Pagegroup (PAGE) 455.80p 2.29%
Johnson Matthey (JMAT) 1,491.50p 2.23%
Breedon Group (BREE) 342.00p 2.09%
JPMorgan Emerging Markets Inv Trust (JMG) 105.60p 1.93%
Serco Group (SRP) 157.20p 1.88%
Great Portland Estates (GPE) 407.80p 1.75%
Rotork (ROR) 315.40p 1.74%

FTSE 250 - Fallers

Genus (GNS) 2,060.00p -2.46%
Tyman (TYMN) 268.00p -2.37%
Derwent London (DLN) 2,080.00p -2.35%
Playtech (PTEC) 412.40p -2.27%
Pennon Group (PNN) 720.50p -2.04%
Direct Line Insurance Group (DLG) 186.20p -1.90%
Paragon Banking Group (PAG) 467.60p -1.76%
Bellevue Healthcare Trust (Red) (BBH) 126.80p -1.40%
JPMorgan Japanese Inv Trust (JFJ) 471.50p -1.36%
ITV (ITV) 59.30p -1.33%