European stocks close lower for second day in a row
European stocks extended the week’s losses as the Stoxx 600 index tentatively closed down 0.5%.
The technology sector posted gains of 0.3%, but all the others remained flat or in negative territory. Mining stocks fell 1.8% to lead the losses, while retail stocks fell 1.5% and oil and gas stocks fell 1.2%.
Pound falls 1.1% and gilt yields rise after UK budget announcement
Sterling was trading around 1.1% lower against the US dollar at $1.1777 in late afternoon trading in London.
It comes shortly after UK Finance Minister Jeremy Hunt unveiled a budget plan involving £30bn ($35.3bn) in spending cuts and £25bn in tax hikes .
Hunt said it was an attempt to restore Britain’s economic credibility and give ‘the world confidence in our ability to pay our debts’ after a widely condemned mini budget rocked the financial markets.
The independent UK Office for Budget Responsibility has predicted that real household disposable income will fall by 4.3% in 2022-23, the biggest single-year fall since records began in 1956-57.
Yields on UK 10- and 30-year bonds, known as gilts, rose slightly following the announcements. At the same time, short-term gilts increased by 10 basis points. Yields move inversely to prices.
Stocks in motion: Siemens and Centrica up, Ocado and Hellofresh down
germany Siemens and owner of British Gas Centric were the top performers in afternoon trading, gaining 6.4% and 5.6% respectively.
Centrica shares rebounded after falling on news that the UK would raise its windfall tax on energy companies from 25% to 35%.
However, food delivery stocks have withered, with a Berlin-based meal kit company HelloFresh lose 8% and grocery service ocado down 9.5%.
Ocado’s fall follows an analyst note from Kintbury Capital that predicted a 50% decline for the stock.
UK is now in recession, says finance minister
The UK is now in recession, according to statistics from the Office for Budget Responsibility, announced by Finance Minister Jeremy Hunt.
Hunt said “tough decisions” would be made to tackle inflation amid the cost of living crisis.
Pound drops as UK Finance Minister Jeremy Hunt delivers budget statement
The pound lost value when UK Finance Minister Jeremy Hunt delivered a budget statement in the fall.
The currency fell 0.69% against the dollar as Hunt announced tax increases for high earners and a temporary tax on electricity generators.
Stocks in motion: Siemens up 7%, NN Group down 6%
Shares of Siemens climbed after the company beat analysts’ expectations by increasing its fourth-quarter earnings dividend. The move was driven by increased profits across all of Siemens’ industrial businesses and resulted in a 7% increase in the share price.
financial services company NN group Shares fell 6% after the organization posted 2025 targets that fell short of expectations. The Dutch insurer also maintained its buy-back policy.
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European markets: here are the opening calls
European markets are heading for a lower open on Tuesday as global sentiment is generally pessimistic this week.
Britain’s FTSE index is expected to open down 7 points to 7,549, Germany’s DAX down 24 points to 14,423, France’s CAC down 18 points to 6,678 and Italy’s FTSE MIB down 47 points to 24,574, according to IG data.
Data releases include Germany’s industrial orders for October. There are no significant gains.