The FTSE 100 looks poised for a hesitant start on Thursday as investors continue to digest the implications of Labour’s first Budget, with initial enthusiasm giving way to more cautious scrutiny.
London’s blue-chip index is expected to slip by around six points at the open, according to futures pricing, after jumping 82 points to 9,691.58 in the immediate aftermath of Rachel Reeves’ speech.
Sterling continued to strengthen overnight while gilt yields edged lower, signalling that markets view the Budget as moderately deflationary. Traders appear to be reassured by the Chancellor’s decision to lean on tax rises to rebuild fiscal headroom and stabilise the government’s long-term finances.
Across the Atlantic, Wall Street extended its positive run, with all major indices posting their best four-day stretch since May as confidence grew that the Federal Reserve could still deliver an interest rate cut next month. The Nasdaq and Russell 2000 both advanced 0.8%, while the Dow Jones and S&P 500 added 0.7%.
US markets will pause today for the Thanksgiving holiday and close early on Friday, setting the stage for thinner trading conditions into the end of the week.
Meanwhile, Asian markets kept the positive momentum alive, with Japan’s Nikkei leading the gains, up 1.2%, while other regional bourses recorded more modest advances.
Overall, sentiment remains constructive, but investors now appear to be shifting from Budget reaction to cautious recalibration.
