British stocks faced challenges for the third consecutive day, closing in negative territory as investors adopted a risk-off approach due to recent and forthcoming economic updates. The UK's FTSE 100 index slipped by 0.61% while market participants absorbed the Labour government's newly presented 2024 Autumn Budget and contemplated its potential implications.
Chancellor Rachel Reeves' Budget led some analysts to reassess expectations for the forthcoming Bank of England monetary policy meeting, with Deutsche Bank Research indicating that it raises the possibility of UK interest rates staying elevated for an extended duration. Meanwhile, across the Atlantic, markets awaited the upcoming jobs report for the world's largest economy, setting the stage for crucial monetary policy decisions from the US Federal Reserve in early November.
'In sum, there is little room for rates to move lower in the US for now. Not from current data until we get another signal - the upcoming payrolls will still be pivotal - and also not from a more technical perspective,' stated ING. On the corporate side, Smith & Nephew ($SN) led the decline among London-listed blue-chip firms, plummeting 12.48% at the close after revising its revenue growth forecast downwards for the full-year 2024, despite reporting a year-over-year revenue increase for the quarter ending September 28.
RBC Capital Markets remarked, 'We expect investors to be disappointed by the downgrades to guidance, despite US Hips & Knees posting positive growth in light of recent investor optimism around business momentum,' while reaffirming its outperform rating for the British medical technology company..