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Summary
- FTSE 100 is expected to open higher ahead of Budget 2021.
- Investors have shifted their focus toward the upcoming announcements by Chancellor Rishi Sunak.
- Prudential Plc, Persimmon Plc, Polymetal Plc, and Johnson Mathey Plc are the major FTSE 100 companies set to announce their Q4 earnings.
UK stock markets are likely to start on a positive footing on Wednesday, 3 March, as domestic market participants await the Budget 2021. Chancellor of the Exchequer Rishi Sunak is all set to table the Budget in the House of Commons. A reversal in Asian equities also bolstered the global mood of investors with Japan’s Nikkei finishing nearly over 0.60 per cent higher.
Equities regain momentum
A comprehensive surge was observed in the other regional Asian peers with China’s Shanghai Composite rising 1.56 per cent, Hong Kong’s Hang Seng gaining more than 2.10 per cent, India’s Nifty 50 advancing 1.19 per cent and South Korea’s Kospi adding 1.03 per cent. Australia’s ASX concluded in the positive region registering a gain of 0.82 per cent.
The futures linked to FTSE 100 rose 0.56 per cent, signalling a positive beginning to the London equities, tracking the Wall Street counterpart. The Dow Jones 30 Futures gained 0.41 per cent. Earlier yesterday, the Dow Industrials closed 0.46 per cent, lower after the index slipped into negative territory in the late afternoon deals.
GBP turns flat
The Great Britain pound (GBP) stalled a notch above 1.39 against the United States dollar (USD) on Wednesday ahead of the Budget 2021. As per the latest data available, the GBP vs USD pair was trading at 1.3958 (0649 GMT), down 0.03 per cent from the previous close of 1.3953.
During the day so far, the currency pair has hovered between a narrow range of 1.3940 - 1.3967, at the interbank foreign exchange market. The Bank of England had fixed a reference exchange rate of 1.3938 USD and 1.1566 EUR against a unit of pound sterling on 1 March.
All eyes on Budget
Investors are waiting for the announcements to be made by the Chancellor in the Budget as definitive monetary allocation towards the ailing sectors will help in a faster bounce back in the recovery.
The worst hit businesses including travel, tourism, restaurants, pubs, bars, quick service eateries and other dine-in facilities, are expecting a roadmap from the government that can pave the way for all-inclusive upturn from the severely disrupted functioning of businesses due to Covid-induced lockdown and the subsequent restrictions.
The government’s support to the industries that are facing difficulties in combating the Covid relapse will be crucial for the economy, as well as the financial markets. Moreover, the funding support to reinforce and expand the ongoing inoculation programme and the monetary allotment for other deprived sectors will be eyed.
A cut in taxation on businesses, rationalisation of VAT, extension of VAT on tourism and hospitality, a marginal drop in the rate of personal taxes, property taxes and the strategic outlay for improving the infrastructure in a post-Brexit environment are expected.
Meanwhile, the upcoming release of Services PMI for the month of February later today is likely to provide a further direction to the London equities. Prudential Plc, Persimmon Plc, Polymetal Plc and Johnson Mathey Plc are the major FTSE 100 companies that are slated to announce their respective Q4 and FY20 earnings today.
