London open: Stocks fall ahead of Budget; StanChart bucks trend

London stocks fell in early trade on Wednesday as jitters crept in ahead of the Autumn Budget, with tax rises and spending cuts on the cards.

At 0820 GMT, the FTSE 100 was down 0.5% at 8,180.73, with Chancellor Rachel Reeves due to deliver the first Labour Budget in 14 years after Prime Minister’s Questions.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: "UK investors are braced for a shovel of tax hikes to fill a yawning black hole in the UK government’s finances. There is speculation that Rachel Reeves will try to find ways to raise revenue and cut spending to cover a shortfall of up to £40 billion. What seems certain is that low earners will escape any tax hikes, with yesterday’s announcement of an increase in the minimum wage, indicating the priorities for the government.

"Prime Minister Keir Starmer has promised the payslips of working people will be protected, so there’s an expectation that employers may bear the brunt of tax rises, most likely through increases in National Insurance.

"Investors with equity holdings may also be targeted through a higher capital gains tax or the ending of inheritance tax relief on small cap firms, quoted on AIM. There are concerns that this may be counter-productive to the government’s aim to stimulate investment in UK assets. Retail investors are enthusiastic participants in the London stock market, and CGT tax nudges also risk disincentivising investment, which could make it harder for UK-listed firms to grow. But Ms Reeves is likely to railroad such criticism with initiatives for a bazooka of investment spending to boost UK growth.

"The details of how debt rules will be changed to enable the government to borrow more without breaking its self-imposed borrowing limits are set to be announced. This strategy has been widely trailed to avoid a temperamental attitude from bond investors breaking out, and so far, it appears to have done the trick, although institutions financing government borrowing will keep a keen eye trained on what the swelling investment budget will be spent on.

"While housebuilders, construction firms and companies providing the backbone for renewable energy are likely to benefit from increased investment spending, businesses in the gambling sector have been steeling themselves for fresh duty hikes. An increase in remote gaming duty is looking likely and although it will pile fresh pressure on companies already facing stricter regulation aimed at limiting problem gambling, it’s unlikely to be a huge game changer for the industry."

In equity markets, Standard Chartered was the standout gainer on the FTSE 100 as it lifted its full-year guidance after a record performance in its wealth division helped third-quarter profits beat expectations.

Glencore advanced after a third-quarter production update.

Next also rallied as the retailer boosted its guidance for both the crucial fourth quarter and the full year, after the recent cold snap caused sales to surge.

Aston Martin was in the black as the car maker backed its full-year outlook and reported a smaller-than-expected loss for the third quarter

GSK fell as the drug maker’s third-quarter sales missed expectations, while Bridgepoint slumped as Citi downgraded the shares to ‘neutral’ following an 80% increase in the share price over the past year.

Market Movers

FTSE 100 (UKX) 8,180.73 -0.47%
FTSE 250 (MCX) 20,575.55 -0.23%
techMARK (TASX) 4,691.61 -0.29%

FTSE 100 - Risers

Standard Chartered (STAN) 902.60p 2.99%
Glencore (GLEN) 412.00p 1.83%
Next (NXT) 10,190.00p 1.19%
Marks & Spencer Group (MKS) 380.70p 1.14%
Flutter Entertainment (DI) (FLTR) 17,365.00p 1.11%
Admiral Group (ADM) 2,596.00p 0.97%
B&M European Value Retail S.A. (DI) (BME) 399.50p 0.96%
Smith & Nephew (SN.) 1,102.50p 0.87%
Pershing Square Holdings Ltd NPV (PSH) 3,550.00p 0.74%
Associated British Foods (ABF) 2,303.00p 0.61%

FTSE 100 - Fallers

Anglo American (AAL) 2,400.50p -3.32%
GSK (GSK) 1,422.50p -2.00%
Lloyds Banking Group (LLOY) 53.52p -1.87%
Diageo (DGE) 2,473.00p -1.73%
Prudential (PRU) 641.00p -1.23%
Rio Tinto (RIO) 5,068.00p -1.23%
BAE Systems (BA.) 1,264.50p -1.17%
Smurfit Westrock (DI) (SWR) 3,406.00p -1.13%
Smith (DS) (SMDS) 462.40p -0.99%
Whitbread (WTB) 3,196.00p -0.90%

FTSE 250 - Risers

AO World (AO.) 114.00p 3.45%
PureTech Health (PRTC) 160.00p 2.96%
Aston Martin Lagonda Global Holdings (AML) 108.00p 2.37%
Centamin (DI) (CEY) 167.00p 2.14%
Telecom Plus (TEP) 1,734.00p 1.88%
Renishaw (RSW) 3,325.00p 1.84%
AJ Bell (AJB) 462.00p 1.76%
Me Group International (MEGP) 215.00p 1.18%
Investec (INVP) 592.00p 1.11%
Ibstock (IBST) 203.00p 1.00%

FTSE 250 - Fallers

Bridgepoint Group (Reg S) (BPT) 313.40p -3.87%
Crest Nicholson Holdings (CRST) 175.00p -2.45%
Wizz Air Holdings (WIZZ) 1,358.00p -2.37%
Genuit Group (GEN) 479.50p -2.24%
Close Brothers Group (CBG) 239.00p -2.21%
Computacenter (CCC) 2,274.00p -2.07%
Moonpig Group (MOON) 240.50p -2.04%
XPS Pensions Group (XPS) 350.00p -1.69%
Mony Group (MONY) 190.00p -1.55%
Target Healthcare Reit Ltd (THRL) 89.00p -1.55%