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FTSE 100 up 0.2%, FTSE 250 adds 0.7%
Telecom Plus sees FY profits above estimates
Essentra up on plan to spin off filter business
Oct 3 (Reuters) - UK's main stock indexes ended higher
for a second straight session on Monday, boosted by
commodity-linked shares and Telecom Plus, with investors
digesting the British government's reversal of tax cuts in its
new fiscal policy.
The blue-chip FTSE 100 and the FTSE 250 mid-cap
indexes rose 0.2% and 0.7%, respectively, marking a
positive start to the fourth quarter.
The British government reversed plans to cut the highest
rate of income tax after their "mini-budget" sparked turmoil in
financial markets last week and prompted rating agency S&P
Global to cut its outlook for the nation on Friday to
"negative", sending the mid-cap index into its steepest weekly
decline since March.
Yields on British government bonds slipped,
while the sterling jumped 1.5% to its pre mini-budget
high and capping gains on the FTSE 100.
"While welcome, it alone won't ease market concerns as it
only represents a small portion of the unfunded tax cuts that
were needlessly announced before next month's budget and OBR
forecasts. The government has a long way to go to restore trust
and confidence," said Craig Erlam, senior market analyst, UK &
EMEA, at OANDA.
Investors have warned that the government still needs to
show that it can afford its plans and that UK assets are "not
out of the woods yet".
"Anytime you have a government who's basically changing
their mind, it's very hard to plan and you have to have a risk
premium on UK assets because of the uncertainty," said Patrick
Armstrong, chief investment officer at Plurimi Wealth.
The core issue is still that prices are high, consumer
confidence is low, with the central bank not expected to turn
dovish any time soon, he said.
Data showed British manufacturing output fell for a third
month in September and orders declined for a fourth consecutive
month, data showed.
BP Plc and Shell gained 2.2% and 2.4%,
respectively, tracking a jump in crude prices as OPEC+
considered cutting output by more than 1 million barrels a
Miners, retailers and
homebuilders added between 1.5% and 3% after
declining sharply in recent weeks.
Essentra Plc advanced 15.3% after it announced the
sale of its filters business and appointed Scott Fawcett,
managing director of its components division, its new chief
Telecom Plus PLC surged 24% after the multi-utility
supplier gave an upbeat profit outlook.
(Reporting by Johann M Cherian and Devik Jain in Bengaluru;
Editing by Savio D'Souza and Bernadette Baum)