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London open: Stocks rebound ahead of Autumn Statement
UK stocks rebounded on Wednesday ahead of Chancellor George Osborne’s joint Spending Review and Autumn Statement.
Osborne is widely expected to announce deep cuts to public sector spending when he kicks off the Autumn Statement at 1130 GMT. He is also tipped to announce possible changes to tax credits, pensions, motoring, savings and housing.
“…the FTSE managed to eke out a 30 point jump as Wednesday got underway. The reason is likely some pre-Autumn Statement excitement; whilst most sectors are likely to suffer under George Osborne’s giant scissors, the UK housing stocks may get a lift as the Chancellor recommits to ‘solving’ the current homes shortage,” said Connor Campbell, financial analyst at Spreadex.
“Already the likes of Barratt Developments, Berkeley Group Holdings and Bellway have jumped around 2% this morning, emblematic of the rest of the sector, with potentially more gains to come.”
The FTSE suffered losses on Tuesday amid geopolitical uncertainty as Turkey shot down a Russian military aircraft on claims it violated its air space and as Easyjet and British Airways cancelled flights to Sharm El Sheikh after the Islamic State claimed responsibility for bombing a plane.
In afternoon trade, a batch of US economic data will be released ahead of close of trading on Thursday for Thanksgiving. Reports include figures on durable goods orders, personal consumption expenditure, initial jobless claims, weekly mortgage applications, the house price index, services, new home sales and the University of Michigan’s consumer confidence index.
On the company front, Betfair Group advanced after saying first half revenue and profit are ahead of expectations.
BG Group was in positive territory as it began commercial operations from the second train at its Queenlsand Curtis liquefied natural gas.
Thomas Cook jumped as it reported its first annual profit after tax since 2010 and said it had got off to a positive start to the next year as well.
UK Mail slumped as its chief executive for the last decade, Guy Buswell, was given the axe as the company struggles with the transition to its new high-tec parcel sorting hub.
Mining companies snapped Tuesday’s rally, including Anglo American, BHP Billiton, Rio Tinto and Antofagasta, as copper prices slipped 0.70% on the Comex.
