Proactive Investors -
- Lead index returns to 7,640.
- Gold hits an all-time high.
- Tax cuts rumoured for Spring Budget.
Fuel duty cut to be extended in budget
A 5p cut to fuel duty will likely be extended by Chancellor Jeremy Hunt in Wednesday’s Spring Budget, according to Sky News.
This would continue a “temporary” freeze which was introduced by Rishi Sunak in 2022 and extended last spring until the end of this month.
Such a move would keep fuel costs down for motorists ahead of what will likely be the government’s final budget before the next election, but would cost the Treasury an extra £5 billion, as per reports.
M&S boss slams ‘economically illiterate’ business rates before budget
Marks & Spencer chief executive Stuart Machin has called on Chancellor Jeremy Hunt to unveil steps in Wednesday’s Spring Budget aimed at Britain’s retail sector.
Hunt should reform the “broken” business rates system, a levy on firms to fund apprenticeships and grant tax-free shopping to overseas tourists, Machin said on Tuesday.
“Government policy makes being an employer of people and running stores - which the same MPs vaunt in their constituencies - really hard,” he added in a LinkedIn post.
Business rates are set to climb by almost 7% from April, which Machin argued was “economically illiterate” given the government’s pledge to tackle inflation.
US stocks called lower at open
The Nasdaq is expected to lead US markets lower on Tuesday’s opening bell, as investors remain focussed on a score of economic news this week.
Futures had the Nasdaq down 111 points at 18,150 pre-market, while the Dow Jones and S&P 500 sat 52 points and 15 points off at 38,970 and 5,123 respectively.
Reports of China’s “ambitious” 5% GDP growth target for the year overnight already underwhelmed the market on Tuesday, XTB analyst Kathleen Brooks noted.
Coupled with “key event risk this week,” Brooks added equity markets were “jittery” on Tuesday.
Tuesday’s key data includes the release of factory orders and the ISM services PMI for February, after the figure hit an 11-month high of 64 in January.
“Services sector inflation remains a thorn in the side of the Fed, and thus traders should keep a particular eye out for the ISM services prices metric,” Scope Markets’ Joshua Mahony commented.
Later in the week brings an interest rate call in Europe, a budget in the UK and jobs data in the US, meanwhile, as Federal Reserve chair Jerome Powell offers a congressional testimony between Wednesday and Thursday, with markets awaiting any clues on when base rate cuts may come.
Among equities, Apple (NASDAQ:AAPL) fell over 2% in pre-market trading, as a hefty fine in Europe was then followed by news that its iPhone had been overtaken as China’s bestseller, also prompting tech firms Broadcom (NASDAQ:AVGO), Micron Technology (NASDAQ:MU) and Qualcomm (NASDAQ:QCOM) to fall.
FTSE 100 swings back into green
By mid-morning the FTSE 100 had regained losses seen earlier in the day to sit one point higher and just in the green at 7,641.
Intertek Group (LON:ITRK) led the index’s risers, with the laboratory testing group gaining 7% after reporting a 13% jump in pre-tax profit on the back of its strongest like-for-like revenue growth in ten years.
M&S also gained ground, climbing 4.9% after the retailer has repeatedly made headlines in recent days, including as chief executive Stuart Machin slated the government for its “economically illiterate” business rates ahead of Wednesday’s budget.
However, it’s most likely an ongoing legal spat with joint venture partner Ocado (LON:OCDO) which has the share up, as per analysts, after M&S has withheld performance-linked payments from the grocery delivery firm.
“There is a bigger issue to consider, and that is whether the tensions could see a parting of ways in time,” AJ Bell’s Danni Hewson commented.
“M&S is on a roll with its business turnaround and the food e-commerce venture is one of the few areas still underperforming. Buying out its partner’s stake would be a logical move as it would give [it] full control and the ability to do things the M&S way.”
Ashtead (LON:AHT) marked the FTSE 100’s main faller meanwhile, with the industrial equipment rental firm slipping 4.7% after warning slow third-quarter trading meant full-year revenue growth would be at the low end of expectations.