Source: Sharecast
The FTSE 100 finished 0.38% higher at 10,881.9p.
Patrick Munnelly, partner, market strategy, at Tickmill Group, said: “Investors sought shelter in UK defensive and personal goods amid a global rout in AI-linked equities, while a pullback in government bond yields provided underlying support ahead of next week’s crucial domestic inflation and labour market data releases.”
Babcock International, Weir and BAE Systems all rose to the top of the leaders’ board, alongside British American Tobacco, Imperial Brands and Diageo.
Banks, however, had a tougher session. According to The Guardian, the Treasury is discussing reversing cuts to the bank surcharge made by Jeremy Hunt, which would raise upwards of £2bn a year. The newspaper said industry figures believe that will probably mean raising the surcharge back to 8% from 3%, to help bolster the government’s fiscal headroom.
Meanwhile, senior banking executives told the BBC they expect the sector to be "on the menu" when the chancellor announces his Budget.
Russ Mould, investment director at AJ Bell, said: "Banking shares took a hit after speculation that Healey would increase tax on the sector.
"Barclays, Lloyds Banking Group and NatWest all saw their share prices fall after reports that Healey might increase the current 3% surcharge on top of corporation tax back to the 8% level last seen in 2023. Doing so could potentially raise around £2bn a year for public finances.
"Banks joined gambling firms and oil and gas producers in protesting against the idea of higher taxes in the UK, arguing such action could discourage investment and lead to job cuts. That would be counterproductive to the government’s drive to grow the economy.
"The government might argue that banks are doling out significant amounts of money in dividends to shareholders, implying there is plenty of scope for them to pay a little bit more tax. The flipside is that any hit to dividends to offset higher taxes would penalise the large number of people in retirement who invest in banking shares for income.”
Mould added that the wider lack of action across markets on Friday was "a massive win in the context of the drama seen earlier in the week". He continued: "The tech stock wobble was felt globally as the sector is a favourite among many investors given it has been a source of strong returns in recent years."
Lloyds was also in focus after RBC Capital Markets downgraded the shares to 'sector perform' from ‘outperform’.
"While structural hedge repricing should provide the bank with a material NII tailwind, today’s downgrade reflects our more cautious view on competition in the UK deposit market and second order implications for NIM, a dynamic we believe is underappreciated," RBC said. It noted that despite being 6% below consensus adjusted pre-tax profit in FY28, an undemanding valuation keeps it from downgrading to ‘underperform’.
Asia-focused HSBC fared better, however, and closed in the black.
Elsewhere, and Man Group was little changed after it said assets under management increased to $270.9bn as at 30 September from $253.6bn three months earlier.
Market Movers
FTSE 100 (UKX) 10,881.90 0.38%
FTSE 250 (MCX) 24,533.90 0.45%
techMARK (TASX) 6,278.18 0.43%
FTSE 100 - Risers
Babcock International Group (BAB) 961.80p 3.60%
WPP (WPP) 412.70p 3.07%
Kingfisher (KGF) 348.80p 2.86%
Autotrader Group (AUTO) 546.00p 2.79%
Weir (WEIR) 2,682.00p 2.60%
BAE Systems (BA.) 1,983.50p 2.40%
Imperial Brands (IMB) 2,879.00p 2.35%
Ithaca Energy (ITH) 298.20p 2.26%
Metlen Energy & Metals (MTLN) 49.28p 2.16%
British American Tobacco (BATS) 4,457.00p 2.08%
FTSE 100 - Fallers
Scottish Mortgage Inv Trust (SMT) 1,545.00p -3.13%
AstraZeneca (AZN) 12,446.00p -1.98%
Alliance Witan (ALW) 1,381.00p -1.22%
NATWEST GROUP (NWG) 666.00p -1.19%
British Land Company (BLND) 417.40p -1.18%
Computacenter (CCC) 5,100.00p -1.16%
SEGRO (SGRO) 913.20p -1.10%
Antofagasta (ANTO) 3,400.00p -1.02%
The Sage Group (SGE) 1,122.00p -1.01%
F&C Investment Trust (FCIT) 343.40p -0.98%
FTSE 250 - Risers
THG (THG) 35.44p 10.75%
CMC Markets (CMCX) 716.00p 5.45%
WH Smith (SMWH) 406.40p 4.96%
Energean (ENOG) 742.50p 4.50%
QinetiQ Group (QQ.) 496.80p 4.02%
Globaldata (DATA) 67.00p 3.96%
RHI Magnesita N.V. (DI) (RHIM) 2,900.00p 3.76%
Chemring Group (CHG) 539.50p 3.75%
W.A.G Payment Solutions (EWG) 105.00p 3.55%
ITV (ITV) 66.30p 3.27%
FTSE 250 - Fallers
Oxford Nanopore Technologies (ONT) 200.00p -4.58%
IP Group (IPO) 68.40p -3.93%
Fidelity Emerging Markets Limited Ptg NPV (FEML) 1,382.00p -3.22%
Ocado Group (OCDO) 291.20p -2.93%
Edinburgh Worldwide Inv Trust (EWI) 256.50p -2.47%
HGCapital Trust (HGT) 375.50p -2.47%
Amaroq Ltd. Npv (DI) (AMRQ) 112.50p -2.39%
Baillie Gifford US Growth Trust (USA) 371.50p -2.24%
JPMorgan Emerging Markets Growth & Income (JMGI) 158.80p -2.22%
SDCL Efficiency Income Trust (SEIT) 33.95p -2.16%