London stocks had fallen further by midday on Thursday as investors sifted through a raft of corporate releases, including third-quarter results from Shell, and continued to mull the implications of the Budget.
The FTSE 100 was down 0.8% at 8,097.54, having closed on Wednesday at its worst level since early August after chancellor Rachel Reeves delivered the first Labour Budget in 14 years.
Russ Mould, investment director at AJ Bell, said: “Yesterday’s relief rally after the Budget didn’t last long.
“Gilt yields jumped after the market cottoned on to a big increase in government borrowing over the next five fiscal years and that extra tax income from changes announced in the Budget won’t appear overnight.
“That means interest rates could stay higher for longer which is not good for housebuilders and retailers hoping for reduced pressures on household finances, hence why those sectors were in the red today. It also explains why banks were among the select few risers on the FTSE 100 as they stand to benefit from a stronger interest rate environment as they can charge more for lending.”
In equity markets, housebuilders were under the cosh, with Persimmon, Taylor Wimpey, Barratt Redrow, Vistry and Bellway among the worst decliners.
Smith & Nephew tanked as it slashed its full-year sales guidance after weaker-than-expected trading in China.
Kainos tumbled as the IT services company it said full-year revenues would be “moderately below” current market consensus. It said its Digital Services and Workday Services divisions continue to be affected by the macroeconomic environment and related delays in client decision-making.
Spectris was weaker after saying it expects to deliver full-year adjusted operating profit of around £200m, which is below consensus expectations.
Haleon fell as it reported a 0.6% decline in reported revenue for the third quarter.
Online grocery retailer Ocado Group edged lower as it confirmed speculation that it is appointing former Microsoft exec Adam Warby to replace chair Rick Haythornthwaite, who announced his resignation six months ago. Warby, who is currently the chair of Nasdaq-listed executive search and management consultancy Heidrick & Struggles International, will join the company on 1 December.
On the upside, Coca-Cola HBC rallied as it upgraded its full-year outlook following a “strong” performance in the first nine months of the year.
Energy major Shell gained as it posted a dip in third-quarter profits, weighed down by lower oil prices, although the decline was less steep than feared.
Adjusted earnings before interest, tax, depreciation and amortisation fell 5% on the second quarter, to $16.01bn, while adjusted earnings – Shell’s definition of net profit – declined 4% to $6.03bn.
That was notably better than the $5.36bn expected by analysts, however.
In broker note action, luxury fashion brand Burberry ticked higher after an upgrade to ‘buy’ at HSBC.
Market Movers
FTSE 100 (UKX) 8,097.54 -0.76%
FTSE 250 (MCX) 20,497.78 -0.95%
techMARK (TASX) 4,620.88 -1.60%
FTSE 100 – Risers
Smurfit Westrock (DI) (SWR) 3,908.00p 3.33%
Coca-Cola HBC AG (CDI) (CCH) 2,724.00p 2.10%
Smith (DS) (SMDS) 485.40p 1.68%
Shell (SHEL) 2,530.00p 1.59%
NATWEST GROUP (NWG) 373.50p 1.58%
Anglo American (AAL) 2,418.00p 1.36%
HSBC Holdings (HSBA) 711.40p 0.74%
Standard Chartered (STAN) 916.00p 0.37%
Lloyds Banking Group (LLOY) 53.84p 0.34%
Prudential (PRU) 642.40p 0.31%
FTSE 100 – Fallers
Smith & Nephew (SN.) 952.40p -13.26%
Persimmon (PSN) 1,513.50p -4.54%
Next (NXT) 9,742.00p -4.43%
Kingfisher (KGF) 294.80p -4.29%
Barratt Redrow (BTRW) 451.20p -4.08%
Taylor Wimpey (TW.) 150.45p -4.05%
British Land Company (BLND) 398.80p -3.58%
Land Securities Group (LAND) 599.00p -3.15%
Berkeley Group Holdings (The) (BKG) 4,472.00p -2.91%
Vistry Group (VTY) 927.50p -2.88%
FTSE 250 – Risers
TBC Bank Group (TBCG) 2,785.00p 5.89%
Bank of Georgia Group (BGEO) 4,160.00p 1.84%
Carnival (CCL) 1,550.50p 1.74%
PPHE Hotel Group Ltd (PPH) 1,230.00p 1.65%
North Atlantic Smaller Companies Inv Trust (NAS) 3,780.00p 1.61%
Investec (INVP) 596.50p 1.27%
Wizz Air Holdings (WIZZ) 1,383.00p 1.24%
Foresight Environmental Infrastructure Limited (FGEN) 88.10p 1.15%
Me Group International (MEGP) 216.00p 0.93%
W.A.G Payment Solutions (WPS) 78.20p 0.77%
FTSE 250 – Fallers
Kainos Group (KNOS) 764.00p -10.64%
SThree (STEM) 355.00p -5.08%
Bellway (BWY) 2,928.00p -4.00%
4Imprint Group (FOUR) 5,190.00p -3.89%
Workspace Group (WKP) 569.00p -3.89%
Dunelm Group (DNLM) 1,118.00p -3.79%
Tritax Big Box Reit (BBOX) 143.10p -3.70%
Watches of Switzerland Group (WOSG) 416.40p -3.52%
Indivior (INDV) 685.00p -3.52%
PZ Cussons (PZC) 83.20p -3.48%