FTSE 100 drops as consumer staples, industrials stocks weigh

The blue-chip index closed down 0.1%, while the mid-cap FTSE 250 rose 0.2%, bouncing from its longest losing streak in more than two years

London’s FTSE 100 edged lower on Monday, as consumer staples and industrials stocks weighed, while investors awaited the British government’s highly anticipated budget this week.

The blue-chip index closed down 0.1%, while the mid-cap FTSE 250 rose 0.2%, bouncing from its longest losing streak in more than two years.

Aerospace and defence stocks dropped 1.7% as peace talks to end the war in Ukraine progressed. BAE Systems declined 3.6%, while Babcock International shed 1.6%.

Beverage stocks dropped 1.8%, with Diageo down 2.2%. The personal care, drug and grocery sub-index slipped 1.2%, with Marks & Spencer dropping 2.6%. Utilities shed 1.3%.

On the flip side, banking stocks gained 1%. Morgan Stanley analysts estimated net interest income growth of 4% next year for European banks.

Standard Chartered jumped 2.9% after the analysts upgraded the lender to “overweight”. Barclays gained 2.1% after Morgan Stanley named it a top pick.

Precious metal miners added 5.9% as gold prices jumped. Fresnillo soared 9.1%, while Endeavour Mining added 4%.

Homebuilders’ stocks rose after Goldman Sachs initiated coverage with a “constructive outlook”. Vistry gained 3.8%.

Travel and leisure stocks added 1.7%, with EasyJet up 3.6%.

The mid-cap index has slid nearly 5% from its October peak amid global market weakness and budget uncertainty.

Finance minister Rachel Reeves looks set to raise taxes by tens of billions of pounds for the second time since the 2024 election to meet her borrowing targets, hoping to avoid a bond market selloff while also increasing welfare spending.

She is unlikely to break an election promise by raising income tax and will resort instead to increases in a range of other taxes.