Top Stories
FTSE 100 climbs ahead of Hunt’s fiscal plans
Global Banking & Finance Review®
Company
By Sruthi Shankar
(Reuters) -London shares rose for a third consecutive session on Monday as investors awaited new finance minister Jeremy Hunt’s fiscal plans that would seek to restore market confidence in Prime Minister Liz Truss’s government.
The blue-chip FTSE 100 index gained 0.5%, while the domestically focussed FTSE 250 index climbed 0.6%.
The pound jumped 0.8% and government bonds rallied ahead of Hunt’s announcement at 1000 GMT, which is expected to detail plans to raise taxes and spend lesser than previously planned.
“The markets have reacted positively to Hunt’s expedited timeline, which alleviates some of the fiscal uncertainty,” said Victoria Scholar, head of investment at Interactive Investor.
“His aim is to reassure the markets and the electorate that he is focused on fiscal discipline and sustainable public finances by reversing some of his predecessor’s unfunded mini-budget announcements.”
The measures come two weeks ahead of schedule as Hunt seeks to calm investors spooked by the Truss government’s tax cut plans unveiled last month, that raised concerns about how they might be funded and sent borrowing costs sharply higher.
Truss on Friday reversed some of the tax cut measures, and replaced Kwasi Kwarteng with Hunt. Meanwhile, the Bank of England (BoE) on Friday concluded its emergency bond purchases aimed at supporting the gilts market. However, expectations still remain for a large BoE rate hike next month.
Among single stocks, Hargreaves Lansdown fell 4.7% after the investment platform said Chief Executive Officer Chris Hill would step down, a day after the company was hit by a multi-million pound lawsuit.
ITV gained 8.4% after the Financial Times reported the commercial broadcaster was reviewing the future of its production arm ITV studios, including whether to sell a stake.
ASOS tumbled 10.6% after the online fashion retailer said it was in talks with lenders to amend the terms of its 350 million pound ($391 million) borrowing facility.
(Reporting by Sruthi Shankar and Bansari Mayur Kamdar in Bengaluru; Editing by Subhranshu Sahu)
The FTSE 100 is a stock market index that represents the 100 largest companies listed on the London Stock Exchange, based on market capitalization.
Market confidence refers to the overall sentiment of investors regarding the stability and performance of financial markets, which can influence investment decisions.
A tax cut is a reduction in the amount of tax that individuals or businesses are required to pay, often aimed at stimulating economic growth.
Explore more articles in the Top Stories category
