The FTSE 100 on Tuesday morning outperformed its French and German peers, as investors await consumer price inflation data from the eurozone.
The UK government is having a busy week. Downing Street has confirmed that the UK is set to relaunch trade talks with India, while ministers continue to face calls from farmers and opposition parties to scrap its changes to agricultural inheritance tax. The National Farmers’ Union is holding a mass lobby of MPs with 1,800 of its members against the government’s plans to impose inheritance tax on farms worth more than £1 million.
Also, a group of Britain’s largest retailers has warned jobs will be lost and prices will rise due to the national insurance rise announced in October’s budget. More than 70 businesses including Tesco, Asda and Sainsbury’s voiced their concerns in an open letter to Chancellor Rachel Reeves, saying the changes mean price hikes are a ‘certainty’.
Finally, data from the Office for National Statistics shows 316,000 new businesses were created in 2023, down 6.2% from 337,000 the year before. This means the rate of new businesses opening hit its lowest level since 2010, at 11% of all active firms.
‘Recent budget decisions unfortunately undermine the UK’s business environment, disincentivising employment and reducing investment through the impact of higher taxes on business costs,’ commented Anna Leach, chief economist at the Institute of Directors. She added: ‘If the government wants to get higher growth, it’ll need a vibrant business sector to deliver it.’
The FTSE 100 index opened up 11.20 points, 0.1%, at 8,120.52. The FTSE 250 was up 13.51 points, 0.1%, at 20,408.92, and the AIM All-Share was down 0.45 points, 0.1%, at 727.10.
The Cboe UK 100 was up 0.2% at 816.33, the Cboe UK 250 was up 0.1% at 17,914.66, and the Cboe Small Companies was up 0.3% at 15,853.27.
Imperial Brands was among leading large-caps, up 1.8%.
The tobacco firm reported decreased profit and revenue but raised its full-year dividend to 153.42 pence.
Diploma led the FTSE 100 laggers with a 4.1% loss despite revenue increasing 14% and pretax profit rising 13% in its latest year.
The technical products and services supplier also lifted its final dividend to 42p and said it was confident it can deliver strong organic growth for the current year.
Bodycote led the FTSE 250, rising 5.4%.
The heat treatment service provider said revenue in the year’s first 10 months rose 1.0% organically to £643.4 million, although conditions remain soft in Industrial Markets and Automotive.
Bodycote also warned that the end market environment remains mixed, and noted challenging conditions.
In European equities on Tuesday, the CAC 40 in Paris was down 0.4%, while the DAX 40 in Frankfurt was down 0.5%.
The pound was quoted at $1.2655 early on Tuesday in London, slightly up compared to $1.2649 at the equities close on Monday. The euro stood at $1.0569, almost flat against $1.0572. Against the yen, the dollar was trading lower at JP¥153.54 compared to JP¥155.01.
In Asia on Tuesday, the Nikkei 225 index in Tokyo was up 0.5%. In China, the Shanghai Composite was up 0.2%, while the Hang Seng index in Hong Kong was up 0.4%. The S&P/ASX 200 in Sydney closed up 0.9%.
In the US on Monday, Wall Street ended mixed, with the Dow Jones Industrial Average down 0.1%, the S&P 500 up 0.4% and the Nasdaq Composite up 0.6%.
Brent oil was quoted lower at $72.59 a barrel early in London on Tuesday from $73.08 late Monday.
‘In energy, US crude posted a 3% rally yesterday, but the bulls could find the $70pb offers hard to clear, as the amply global supply/weak global demand outlook remains supportive of the bears, said Swisssquote’s Ipek Ozkardeskaya. ’The short-end of the market shifted into contango, another signal that investors price in an oversupplied oil market, which could cap the upside potential of short-term price rallies.‘
Gold was quoted higher at $2,623.56 an ounce against $2,610.04.
Still to come on Tuesday’s economic calendar, as well as the European releases there are building permits and Redbook index data from the US.
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