Early market roundup: FTSE 100 edges up as US Fed cut conviction grows

Stocks in London opened slightly higher on Tuesday, with share price surges for retailers Kingfisher and AO World in the spotlight, but insurer Beazley sank.

The FTSE 100 index rose 22.75 points, 0.2%, to 9,557.66. The FTSE 250 added just 4.37 points at 21,415.95, and the AIM All-Share was 3.37 points higher, 0.5%, at 740.53.

The Cboe UK 100 was up 0.1% at 955.26, the Cboe UK 250 was flat at 18,583.38, but the Cboe Small Companies was up 0.1% at 17,075.07.

The CAC 40 in Paris rose 0.3%, while the DAX 40 in Frankfurt edged slightly higher.

The yield on the 10-year US Treasury narrowed to 4.04% from 4.05%. The 30-year yield slimmed to 4.68% from 4.69%.

In Tokyo late on Tuesday, the Nikkei 225 rose 0.1%. In China, the Shanghai Composite rose 0.9%, the Hang Seng Index was 0.7% higher. The S&P/ASX 200 in Sydney rose 0.1%.

In New York on Monday, the Dow Jones Industrial Average added 0.4%, the S&P 500 jumped 1.6% and the Nasdaq Composite soared 2.7%.

Against the dollar, sterling climbed to $1.3116 on Tuesday morning, from $1.3104 at the time of the London equities close on Monday. The euro was largely flat at $1.1523 from $1.1525. Against the yen, the buck slipped to JP¥156.65 from JP¥156.91.

ING analysts believe the dollar is primed for a ‘correction’.

‘US data might potentially offer the trigger for that correction, but not today in our view. Retail sales should be quite robust, and we expect a moderate drop in consumer confidence to 93.5, close to consensus. We also see September PPI in line with expectations at 0.3% month-on-month,’ ING analysts said.

‘We don’t expect major implications for rate expectations, which are currently being driven by some dovish Fedspeak. Alongside Chris Waller, we heard Mary Daly supporting a cut in December. She isn’t a voter this year, but her stance still represents some dovish pressure on the FOMC in what is shaping up as a close decision. Markets are back to pricing in 19bp of easing for December, but the dollar has remained resilient. Some year-end rebalancing flows before Thanksgiving may be getting in the way, but unless markets have a hawkish rethink, the dollar looks too strong relative to short-term rate differentials at these levels, and we see some material downside risks.’

US producer price and retail sales data are released at 1330 GMT.

A barrel of Brent rose slightly to $62.93 on Tuesday morning, from $62.90 late Monday. Gold rose to $4,136.88 an ounce, from $4,097.64.

Focus on Wednesday turns to the UK government’s budget. Chancellor Rachel Reeves has urged Labour MPs to back her forthcoming budget, as the final day before the major financial statement dawns.

She is due to deliver her second budget in the House of Commons on Wednesday, in which she is widely expected to pull the lever on tax hikes in order to fill a black hole in the public finances.

Reeves called for unity within the Labour Party as she spoke to restive backbenchers on Monday night, urging them to support her efforts to steer the national economy.

In London, Kingfisher shares rose 6.1% and AO World added 8.5%. The retailers were the pick of the bunch on the FTSE 100 and FTSE 250, respectively, after raising profit guidance.

B&Q and Screwfix owner Kingfisher now expects adjusted pretax profit in the range of £540 million to £570 million, lifting its view from the previous expectation, which was the upper end of a £480 million to £540 million range.

AO World in September upped its profit view to a £45 million to £50 million range. Since then, it has seen ‘continued positive trading’ and it now expects pretax profit ‘around the top’ of the outlook range.

Insurer Beazley fell 9.8% despite raising its guidance. It now expects an undiscounted combined ratio in the ‘low 80s’, from its previous view of ‘mid-80s’. A combined ratio below 100% indicates profit on underwriting, so the lower, the better.

Beazley said insurance written premiums rose 1% on-year in the nine months to September 30 to $4.67 billion from $4.63 billion.

‘Premium growth slowed down by slightly more than we had anticipated,’ analysts at Peel Hunt commented.

Elsewhere, Marston’s shot up 9.3%. It reported annual profit growth, despite revenue edging fractionally lower, and the pub firm said ‘Christmas bookings are strong’.

Pretax profit in the year ended September 27 jumped to £88.3 million from £14.4 million, though revenue fell 0.1% to £897.9 million from £898.6 million. On a like-for-like basis, sales rose 1.6%.

‘We’ve delivered another strong year ahead of plan, executing on our strategy to be a high-margin, highly cash-generative local pub company. For the second consecutive year, we’ve delivered significant growth in profit, margin and free cash flow, underlining the strength of our market-leading pub operating model and the outstanding work of our teams,’ CEO Justin Platt said.

Marston’s says like-for-like sales in the eight weeks to November 22 are tracking in line with the prior year. Christmas bookings are ‘strong’, 11% higher than the prior year.

‘The group is well positioned for a strong festive period and FY2026, supported by ongoing format conversions and a robust calendar of demand-driving events, including the 2026 World Cup,’ it said.

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