(Reuters) -London’s FTSE 100 edged lower on Monday, as consumer staples and industrials stocks weighed, while investors awaited the British government’s highly anticipated budget this week.
The blue-chip index closed down 0.1%, while the mid-cap FTSE 250 added 0.2%, bouncing from its longest losing streak in more than two years.
Aerospace and defence stocks fell 1.7% as peace talks to end the war in Ukraine progressed. BAE Systems fell 3.6%, while Babcock International lost 1.6%.
Beverage stocks declined 1.8%, with Diageo down 2.2%. The personal care, drug and grocery sub-index fell 1.2%, with Marks & Spencer falling 2.6%. Utilities lost 1.3%.
On the flip side, banking stocks rose 1%. Morgan Stanley analysts estimated net interest income growth of 4% next year for European banks.
Standard Chartered climbed 2.9% after the analysts upgraded the lender to “overweight”. Barclays added 2.1% after Morgan Stanley named it a top pick.
Precious metal miners rose 5.9% as gold prices climbed on stronger Fed rate-cut bets. Fresnillo surged 9.1%, while Endeavour Mining gained 4%.
Homebuilders’ stocks <.FTNMX402020> advanced after Goldman Sachs initiated coverage with a “constructive outlook”. Vistry rose 3.8%.
Travel and leisure stocks advanced 1.7%, with EasyJet up 3.6%.
The mid-cap index has shed around 5% from its October peak amid global market weakness and budget uncertainty.
Finance minister Rachel Reeves looks set to raise taxes by tens of billions of pounds for the second time since the 2024 election to meet her borrowing targets, hoping to avoid a bond market selloff while also increasing welfare spending.
She is unlikely to break an election promise by raising income tax and will resort instead to increases in a range of other taxes.
Meanwhile, global stocks climbed after comments from a U.S. Federal Reserve official last week boosted expectations for a December rate cut. The gains followed a sharp pullback in equity markets on concerns over elevated valuations in AI stocks.
Anglo American gained 0.9% after global miner BHP abandoned a last-ditch effort to buy its rival.
(Reporting by Utkarsh Tushar Hathi in Bengaluru; Editing by Tasim Zahid and Alex Richardson)
