London’s FTSE 100 edged lower on Monday, closing down 0.1%, as investors braced for the British government’s budget announcement this week. The mid-cap FTSE 250, however, bucked the trend, adding 0.2% after rebounding from its longest losing streak in over two years. Finance minister Rachel Reeves is expected to raise taxes to meet borrowing targets while increasing welfare spending.
Aerospace and defence stocks experienced declines, with the sector index falling 1.7% amid progress in Ukraine peace talks. BAE Systems, a defence, security, and aerospace company, saw its shares drop 3.6%. Babcock International, which provides engineering services, also experienced a loss of 1.6%. Beverage stocks also declined, dragged down by a 2.2% fall in Diageo.
Banking stocks, on the other hand, saw gains, rising 1% after Morgan Stanley analysts projected a 4% net interest income growth for European banks next year. Standard Chartered climbed 2.9% following an upgrade to ‘overweight’ by Morgan Stanley, while Barclays added 2.1% after being named a top pick. Precious metal miners also surged, with Fresnillo jumping 9.1% and Endeavour Mining gaining 4% as gold prices rose on increased bets for Federal Reserve rate cuts.
Homebuilders advanced following a constructive outlook from Goldman Sachs. Vistry saw a gain of 3.8%. Travel and leisure stocks also performed well, rising 1.7%, with EasyJet shares up 3.6%. BHP Group abandoned its effort to acquire Anglo American, however Anglo American still gained 0.9%.
