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U.K. equities edged up on Monday with the bluechip benchmark rising 0.6% ahead of Prime Minister Sir Keir Starmer's new administration's inaugural budget announcement on Wednesday and the highly anticipated monthly U.S. employment data release on Friday. In the lead-up to the Budget, British business confidence fell to a four-month low in October before the new government's first budget plan, a survey showed on Monday, reflecting other signs of corporate unease about potential tax hikes. Investors are intently focused on the budget scheduled for Oct. 30, where UK finance minister Rachel Reeves faces the difficult task of increasing tax revenues to invest more in public services and new infrastructure.

Energy stocks declined, with BP Plc dropping 1.7% and Shell losing over 2% as crude prices fell to four-week lows due to diminishing concerns about a Middle East war. Investors were relieved as Israeli strikes on Iran over the weekend did not target the OPEC member's oil facilities. The travel and leisure sector saw a 2% increase, driven by a 10.5% rise in the share price of the online train ticket seller Trainline. The company raised its full-year revenue forecast, now expecting annual revenue growth of 11%-13%, up from its previous outlook of 7%-11%. Shares of EasyJet and British Airways-owner IAG also gained, rising 4.1% and 2.5% respectively, buoyed by the prospect of lower fuel costs.

In single stock stories shares of British lenders Lloyds Banking Group and Close Brothers decline further from the previous session's losses. Close Brothers falls 6.8%, its lowest level since 1995, while Lloyds Banking Group drops 1.8% to 56.6 pence, among the top losers on the FTSE 100 index. The declines follow a London court ruling that motor finance brokers must fully inform customers about commissions when taking out car loans, which pulled Lloyds down by as much as 7.4% and Close Brothers by as much as 24.5% on Friday. Lloyds, a key provider of motor finance, is assessing the potential impact of the court decisions, which relate to commission disclosure and consent obligations beyond the scope of the current FCA motor commission review. Close Brothers is among the top losers on the FTSE mid-cap index, with year-to-date losses of 67.6%, while Lloyds has gained 18.8% so far this year.

Aerospace components supplier Melrose Industries' shares rise around 8%, leading the FTSE100 index. The company has released an explainer for its Revenue & Risk Sharing Partnership (RRSP) portfolio, one of its biggest revenue generators. The company states that it only records 10% to 30% of available aftermarket income over the life of the engine, leading to a discrepancy between its profit and cash. Citi sees this as a positive step towards the market understanding the potential strength of the company's mid-term cash generation. Stifel analyst Mark Davies Jones also views the explainer as a positive development for the shares. MRON has declined approximately 16% year-to-date.

Technical & Trade View

FTSE Bias: Bullish Above Bearish below 8225

• Primary support 8100
• Primary objective 8600
• Daily VWAP Bullish
• Weekly VWAP Bearish

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