The pound was continuing to enjoy its Rishi rise on Wednesday, shrugging off news of a delay to a costed budget statement to take advantage of a weaker dollar, as Rishi Sunak took part in his first Prime Minister's Questions.
Sterling was quoted at $1.1568 at midday, sharply higher from $1.1464 at the London equities close on Tuesday. The pound hit an intraday high of $1.1618 - up 10% from its post-mini-budget low of $1.0533 - before sliding back after news the UK has postponed its budget plan until November 17.
'Markets...see [Sunak] as a fairly steady pair of hands, particularly when it comes to stabilising the UK economy,' said Matthew Ryan, head of market strategy at Ebury. 'Sunak's leadership credentials are yet to really be tested, but investors seem to be of the view that his largely encouraging stint as chancellor should stand him in good stead.'
Downing Street has said Chancellor Jeremy Hunt's planned Halloween budget to get the public finances back on track has been delayed until the middle of next month.
The medium-term fiscal plan now will be published on November 17 as an autumn statement, alongside a new set of economic forecasts from the Office for Budget Responsibility.
Hunt informed ministers of the decision at the first meeting of Rishi Sunak's new cabinet in Downing Street on Wednesday morning.
Following the meeting, Hunt told broadcasters: 'I want to confirm that it will demonstrate debt falling over the medium term, which is really important for people to understand. But it's also extremely important that that statement is based on the most accurate possible economic forecasts and forecasts of public finances.'
Hunt said he discussed the move with Bank of England Governor Andrew Bailey on Tuesday night, saying the governor 'understands the reasons for doing that and I'll continue to work very closely with him'.
The FTSE 100 index was down 21.85 points, or 0.3%, at 6,991.66. The mid-cap FTSE 250 was up 125.41 points, or 0.7%, at 17,957.04, and the AIM All-Share was up 4.13 points at 803.57.
The Cboe UK 100 was down 0.3% at 698.46, the Cboe UK 250 up 1.0% at 15,374.95, and the Cboe Small Companies up 0.5% at 12,334.67
In European equities on Tuesday, the CAC 40 in Paris was 0.1% higher, while the DAX 40 in Frankfurt was 0.5% higher.
In London, housebuilders were enjoying a bout of optimism on the hope Sunak's government can avoid the deep recession analysts feared was around the corner if Liz Truss's economic plans were carried out.
Barratt was 1.6% higher, Taylor Wimpey 1.3%, Berkeley 1.2% and Persimmon 1.0%.
WPP gave back 3.3% despite lifting its annual top-line guidance after a strong rise in third-quarter revenue.
The London-based advertising agency said its third-quarter revenue rose 10% to £3.57 billion from £3.24 billion a year earlier, with like-for-like revenue up 2.7%. Its revenue less pass-through costs increased 13% to £2.99 billion from £2.64 billion.
Looking ahead, WPP upgraded its 2022 guidance for growth in full-year like-for-like revenue less pass-through costs to 6.5% to 7.0%, compared to a previously expected range of 6.0% to 7.0%. Less positively, it said it expects headline operating margin growth of between 30 to 50 basis points. It had previously guided for growth of 50 bps.
Consumer goods firm Reckitt Benckiser lost 4.2%.
It reported strong quarterly revenue growth as prices and sales mix improved, despite a decline in volumes. In the third quarter, the Slough, Berkshire-based Reckitt said total revenue grew 14% year-on-year to £3.74 billion, or 7.4% on a like-for-like basis.
Price and mix improvements of 12% helped to offset a volume decline of 4.6%. Reckitt noted 'continued broad-based growth and momentum' during the period.
With a strong performance in the year so far, Reckitt reiterated its annual targets. However, for like-for-like revenue growth, it tweaked the range upwards to between 6% and 8%, compared to 5% and 8% previously.
Standard Chartered fell 4.0%.
The Asia-focused bank recorded a substantial increase in profit as it benefited from rising interest rates across the world.
In the three months that ended September 30, Standard Chartered recorded a 40% increase in pretax profit to $1.39 billion from $996 million a year before. On an underlying basis, profit rose 32% to $1.42 billion from $1.08 billion.
StanChart's income rose 15% to $4.33 billion from $3.76 billion a year before. In constant currency terms, it recorded a 22% increase.
Standard Chartered said its performance has been strong and that the 'pace of economic recovery' in many of its footprint markets is 'encouraging'. Despite increasing recessionary pressures in western markets, the company expects income to grow by around 13% in all of 2022, in line with year-to-date growth.
The bank expects its credit impairment to be slightly above the year-to-date annualised loan-loss rate of 18 basis points.
Standard Chartered expects net interest margin progression to average around 165 basis points in 2023, which combined with continued strong business momentum and positive jaws ratio, means it 'remains on-track' to deliver its 10% return on target equity target in 2024, if not earlier.
Looking ahead to the open in New York, the Dow Jones Industrial Average is called down 0.1% and the S&P 500 down 0.7%. The tech-heavy Nasdaq Composite is expected to open 1.6% lower.
The three indices had closed up as much as 2.3% on Tuesday, but the mood on Wall Street was hurt by disappointing tech earnings after the close. The figures from Alphabet and Microsoft appeared to confirm fears of a spending slowdown in the US.
AJ Bell head of investment analysis Laith Khalaf remarked: 'All good things must come to an end, but it is still a jolt to see advertising revenue on Google-owner Alphabet's Youtube platform fall for the first time on record. While bad news for its parent company, the reversal in fortunes also says something less than encouraging about the state of the economy and is a negative omen for the wider digital advertising space.
'The results of the big technology firms were seen as a key determining factor in market sentiment going into the US third quarter reporting season and both Microsoft and Alphabet have given investors reason to worry.'
Alphabet was down 6.0% in pre-market trading in New York, while Microsoft was 6.3% lower.
Similarly benefiting from the recent dollar weakness, the euro traded at $1.020 midday Wednesday, moving back above parity for the first time since the start of October, and up from $0.9963 late Tuesday. Against the yen, the dollar was quoted at JP¥147.14, down from JP¥147.77.
Gold was quoted at $1,669.20 an ounce midday Wednesday, higher than $1,655.96 on Tuesday evening in London. Brent oil was trading at $91.82 a barrel, soft from $91.91 late Tuesday.
Copyright 2022 Alliance News Limited. All Rights Reserved.
