Business
FTSE 100 ends week on a high despite downbeat economic news
The FTSE 100 ended in the green on Friday, outperforming European peers, despite downbeat economic news ahead of next week’s Budget.
The index closed up 12.06 points, 0.1%, at 9,539.71.
The FTSE 250 ended 20.98 points lower, 0.1%, at 21,363.37, while the AIM All-Share fell 5.56 points, 0.8%, to 735.64.
For the week, the FTSE 100 was down 1.6%, the FTSE 250 fell 2.1%, and the AIM All-Share declined 1.4%.
Figures showed a surprise drop in retail sales, higher government borrowing than expected and a slowdown in private sector activity.
The Office for National Statistics said net borrowing amounted to £17.4 billion in October, easing from £19.9 billion in September, but above an FXStreet cited forecast of £15.2 billion.
The figure topped a £14.4 billion Office for Budget Responsibility forecast outlined in March.
Meanwhile, the flash composite PMI fell to a two-month low of 50.5 points in November from October’s final tally of 52.2.
The flash manufacturing PMI rose to 50.2 points in November from 49.7 in October, a 14-month-high. But the services PMI fell to a seven-month low of 50.5 from 52.3 in October.
Meanwhile, retail sales fell 1.1% in October from September, the ONS said. They had been expected to tread water, according to consensus cited by FXStreet. They had risen 0.7% in September.
The data was seen as increasing the likelihood of an interest rate cut by the Bank of England in December although sterling was little moved.
Pantheon Macroeconomics chief UK economist Rob Wood said risks to growth forecasts now “lie to the downside”.
“Those downside growth risks along with sharply weaker inflation signals from the PMI cements a December rate cut from the (Monetary Policy Committee). We think the bar to rate setters holding in December will now be very high,” he added.
Mr Wood said a range of surveys give a consistent signal that the past couple of months of “tax hokey-cokey” ahead of the Budget is leading households and firms to pause spending and “wait-and-see who gets hit by the smorgasbord of tax hikes”.
Sterling was quoted at 1.308 dollars at the time of the London equities close on Friday, slightly lower compared to 1.309 on Thursday.
The euro stood at 1.150 dollars, lower against 1.153 a day earlier.
In European equities on Friday, the Cac 40 in Paris ended flat, while the Dax 40 in Frankfurt declined 0.8%.
In New York, markets were higher at the time of the London equity market close.
The Dow Jones Industrial Average was up 0.7%, the S&P 500 index was 0.5% higher, and the Nasdaq Composite was up 0.2%.
The yield on the US 10-year Treasury was at 4.07%, trimmed from 4.10% on Thursday. The yield on the US 30-year Treasury was 4.71%, narrowed from 4.72%.
Back in London, hopes of lower interest rates gave housebuilders a boost.
In addition, reports suggested next week’s Budget could include changes to Lisas, aimed at helping first-time buyers.
On the FTSE 100, Persimmon rose 4.7%, Barratt Redrow climbed 3.6% and Berkeley gained 2.2%.
Credit checking agency Experian rose 3.5% as Citi upgraded to ‘buy’ from ‘hold’.
The broker thinks margins at Experian’s North American business could surprise on the upside.
Babcock International gained 1.8% as it boosted its interim dividend and backed full-year targets, after trading improved in the first half.
The London-based aerospace and defence engineering firm posted £226.3 million in pretax profit for the six months ended September 30 – a 32% jump from £172.0 million the year previously.
Babcock declared a first-half dividend of 2.5p per share, up 25% from 2.0p.
Recent falls in US technology stocks weighed on Polar Capital Technology Trust, down 5.3% and Scottish Mortgage Investment Trust, down 3.1% as the initial boost from Nvidia results quickly fizzled out.
“Relief around Nvidia’s results didn’t last long as investors couldn’t shake their fears that the AI boom might have got ahead of itself,” said Dan Coatsworth, head of markets at AJ Bell.
“There is a lingering concern that the AI revolution might take longer than expected to truly transform the way companies do business.
“People in the late 1990s were right to predict the internet would change the world, they just had to wait a bit longer than initially thought, and that resetting of expectations was central to the bursting of the dotcom bubble,” he added.
On the FTSE 250, Hammerson rose 7.1% after buying the remaining 50% interest in The Oracle in Reading and raising guidance.
Hammerson raised its financial 2025 total gross rental income growth guidance to 19%, from the 17% previously guided.
Brent oil was quoted lower at 62.15 dollars a barrel at the time of the London equities close on Friday, from 63.44 late on Thursday.
Gold traded higher at 4,073.57 dollars an ounce on Friday against 4,058.47 on Thursday.
The biggest risers on the FTSE 100 were Persimmon, up 57.0p at 1,258.5p, Diageo, up 64.0p at 1,768.0p, Barratt Redrow, up 13.3p at 378.8p, Experian, up 114.0p at 3,353.0p and London Stock Exchange, up 272.0p at 8,602.0p.
The biggest fallers on the FTSE 100 were Melrose Industries, down 37.0p at 570.0p, JD Sports Fashion, down 4.4p at 72.9p, Polar Capital Technology Trust, down 24.0p at 433.0p, Glencore, down 14.0p at 335.0p, and Rolls Royce, down 41.0p at 1,038.0p.
Contributed by Alliance News
A senior official at the UK’s official forecaster has said he does not believe the chancellor was being misleading when she said the state of the public finances were “very challenging” in the run-up to the Budget.
Prof David Miles from the Office for Budget Responsibility (OBR) told MPs Rachel Reeves’s comments ahead of announcing her tax and spending plans were “not inconsistent” with the situation she faced.
Reeves has rejected claims she misled the public about the country’s finances after the OBR’s economic forecasts revealed they were better than widely thought.
However, Prof Miles said despite the forecast, the chancellor still faced a “very difficult Budget and very difficult choices”.
He said the OBR raised concerns with Treasury officials about leaks to the media in the run-up to the Budget, adding: “I think it was clear that we didn’t find this helpful. We made that clear.”
But he said the watchdog was not “at war” with the Treasury.
A political row has broken out over the information shared with the public over the past few weeks over the health of the economy and the choices required to be made by the chancellor.
Last week’s Budget included a total £26bn of tax rises, with £8bn set to be raised by extending the freeze on income tax and National Insurance thresholds for a further three years. The two-child benefit cap was also scrapped.
In the build-up to the Budget, Reeves repeatedly talked about a downgrade to the UK’s predicted economic productivity that would make it hard for her to meet her borrowing rules, fuelling speculation that the income tax rates themselves would be raised, which would break a manifesto pledge.
On 4 November, she used a rare pre-Budget speech in Downing Street to warn the UK’s productivity was weaker “than previously thought” and that had “consequences for the public finances too, in lower tax receipts”.
However, it has since emerged that the OBR, which assesses the government’s tax and spending policies, had told the Treasury on 31 October that it was on course to meet its main borrowing rule by £4.2bn due to the downgrade in productivity being offset by higher wages, which increase the government’s tax receipts.
The Conservatives have claimed the chancellor gave an overly pessimistic impression as a “smokescreen” to raise taxes in order to increase welfare spending, with leader Kemi Badenoch claiming she “lied to the public”.
The £4.2bn buffer was less than the £9.9bn Reeves had left herself at the previous Budget, and Prof Miles told a committee of MPs, still “posed a significant” challenge to the government, which wanted to increase the figure overall.
The so-called headroom chancellors have left themselves – essentially a buffer to fall back on – has been smaller in recent years. Prior to November 2022, chancellors tended to create a £20bn-£30bn buffer.
Questioned by MPs over the chancellor not mentioning the surplus in the forecast, Prof Miles said the £4.2bn, while a positive number, “was by a tiny margin”, adding that the OBR was not actually looking for it to be interpreted as “this is very, very good news, there is no hole to fill – as people were saying”.
“I don’t think it was misleading, for my own view, for the chancellor to say that the fiscal position was very challenging at the beginning of that week.
“The chancellor was saying that this was a very difficult Budget and very difficult choices needed to be made. And I don’t think that that was in itself inconsistent with the final pre-measures assessment we’d made, which, although it showed a very small positive amount of so-called headroom, it was wafer thin.”
Prof Miles added that the £4.2bn buffer would also have been reduced to minus £3bn because the OBR’s forecast did not take into account the welfare and winter fuel payment U-turns made by the government.
Business
Exato Technologies IPO: The Rs 37-Crore SME IPO Gets Bids Worth Rs 23,600 Crore; GMP Surges To 114%
Last Updated:
Exato Technologies IPO: Unlisted shares of Exato Technologies Ltd are trading at Rs 300 apiece in the grey market, which is a GMP of whopping 114.29% over the IPO price of Rs 140.
Exato Technologies IPO Day 3.
Exato Technologies IPO Day 3: The initial public offering (IPO) of Exato Technologies Ltd, which opened on Friday, witnessed its final day of bidding today, Tuesday, December 2. The Rs 37.5-Crore BSE SME IPO closed at 5:00 pm today. On the last day of bidding on Tuesday, the IPO received a whopping 947.21 times subscription, receiving bids for 1,68,60,29,000 shares as against the 17,80,000 shares on offer. With this, the IPO received bids worth Rs 23,600 crore.
Its retail category got a 1,068.74x subscription, while its non-institutional investor (NII) quota got a 1,488.72x subscription. The QIB category received a 327.08x subscription.
Exato Technologies IPO GMP Today
According to market observers, unlisted shares of Exato Technologies Ltd are currently trading at Rs 300 apiece in the grey market, against the upper IPO price of Rs 140. It means a grey market premium (GMP) of a whopping 114.29%, indicating a blockbuster listing for the company.
The GMP had stood at 107.14% in the morning and 93.57% on Monday.
The GMP is based on market sentiments and keeps changing. ‘Grey market premium’ indicates investors’ readiness to pay more than the issue price.
The price band of the IPO has been fixed at Rs 133-140 per equity share.
Exato Technologies IPO: Allotment & Listing Dates
The three-day IPO bidding will be closed today, December 2. Following this, its allotment will be finalised on December 3. However, its market listing will take place on December 5 on the BSE SME platform.
Exato Technologies IPO: More Details
The Exato Technologies IPO is a book-built issue worth Rs 37.45 crore, comprising a fresh issue of 0.23 crore shares amounting to Rs 31.85 crore and an offer for sale of 0.04 crore shares worth Rs 5.60 crore.
The company has set a price band of Rs 133 to Rs 140 per share. The lot size is 1,000 shares, translating into a minimum retail investment of Rs 2,80,000 for two lots at the upper price band. For high-net-worth individuals (HNIs), the minimum investment is 3 lots (3,000 shares), totalling Rs 4,20,000. GYR Capital Advisors Pvt. Ltd. is the book-running lead manager for the issue, Kfin Technologies Ltd. is the registrar, and Giriraj Stock Broking Pvt. Ltd. is the market maker.
Financially, Exato Technologies reported a 10% rise in revenue and an 84% jump in profit after tax between FY24 and FY25.
Founded in 2016, the company positions itself as a customer transformation partner, offering technology-led solutions aimed at improving customer engagement and operational efficiency. Its service portfolio spans CX and analytics, unified communications and infrastructure, and its proprietary platform Exato IQ.
The company caters to clients across BFSI, healthcare, retail, telecom, manufacturing, and the IT/ITeS and BPO/KPO sectors, leveraging AI, automation, and cloud technologies to deliver scalable and intelligent customer service solutions.
About the Author
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Archie MitchellBusiness reporter
PA MediaThe Bank of England has warned of a “sharp correction” in the value of major tech companies with growing fears of an artificial intelligence (AI) bubble.
It said share prices in the UK are close to the “most stretched” they have been since the 2008 global financial crisis, while equity valuations in the US are reminiscent of those before the dotcom bubble burst.
The central bank’s financial stability report warned valuations are “particularly stretched” for companies focused on AI.
In its report the Bank also announced plans to lower the amount of capital High Street banks need to hold in a bid to boost lending and spur economic growth.
It marks the first reduction in the amount lenders need to hold since the 2008 financial crisis, and followed stress tests showing they would be able to withstand a crisis scenario with unemployment doubling, house prices plummeting and the economy contracting by 5%.
AI bubble fears
The Bank said the growth of the AI sector in the next five years would be fuelled by trillions of dollars of debt, raising financial stability risks if the value of the companies falls.
It cited industry figures forecasting spending on AI infrastructure could top $5tn (£3.8tn) and said much of this would be funded by AI firms themselves, but around half would come from outside sources, mostly through debt.
“Deeper links between AI firms and credit markets, and increasing interconnections between those firms, mean that, should an asset price correction occur, losses on lending could increase financial stability risks,” it said.
The Bank of England is the latest institution to sound the alarm over a potential crash in the value of AI firms reminiscent of previous incidents such as the dotcom bubble.
Jamie Dimon, the chief executive of US bank JP Morgan, told the BBC in October he was “far more worried than others” about the risk of a serious market correction in the coming years.
The International Monetary Fund and the Organization for Economic Co-operation and Development have also warned of price corrections.
The dotcom booms refers to a period in the late 1990s, during which the values of early internet companies surged on a wave of optimism for what was then a new technology, before the bubble burst in early 2000 – with many share prices collapsing.
This led to some companies going bust, resulting in job losses.
A drop in share prices can also hit the value of people’s savings including their pension funds.
Fears over an AI-related stock market correction come as Chancellor Rachel Reeves used her Budget to encourage savers to pile cash into stocks and shares by reducing the amounts which can be saved in cash Isas.
Bank of England governor Andrew Bailey has previously raised fears about a potential financial crash, warning after the collapse of two US companies that “alarm bells” were ringing.
On Tuesday he said the AI sector in the US is “very concentrated”, making up a large portion of the value of the country’s stock market.
But he added: “There is a difference to the dotcom situation in that these companies have got positive cash flows, they are not created on hope.
“But, as we see, and we saw last week in the debate about whether Google is moving onto Nvidia’s patch, it doesn’t mean to say everybody is going to win, it doesn’t mean to say everyone is going to win equally.
“It is important to be clear it is not inconsistent, quite consistent in fact that AI turns out to be the next general purpose technology in terms of prompting productivity growth across economies. I hope it is, but we’ll see.”
Global risks
The central bank also said the risks to financial stability had risen during 2025, citing geopolitical tensions, global trade wars and rising borrowing costs for governments.
It said growing tension between countries had specifically raised the prospect of cyber-attacks and other disruptions.
After assessing High Street lenders’ ability to cope in a crisis situation, the Bank has proposed lowering the benchmark for Tier 1 capital requirements for firms to 13% from the 14% level it has been at since 2015. The requirement refers to the buffer banks must hold in case of any losses from risky lending.
The central bank said this would still give firms a £60bn buffer against their minimum requirements so they would be able to continue lending to households and companies.
The Bank’s Financial Policy Committee said lowering the threshold would make it easier for lenders to offer loans to households and businesses. The changes are due to come into force in 2027.
Elsewhere in the financial stability report, the Bank warned homeowners coming off fixed-rate mortgages in the next two years face a £64 increase in their monthly repayments.
The central bank said the typical owner-occupier coming off a fixed rate would see an 8% jump in their bills as the impact of higher interest rates continues to bite.
In total, 3.9 million people, or 43% of mortgage holders, are expected to refinance at higher rates by 2028, the Bank said.
But a third will see their monthly payments fall in that period, it added, with interest rates having fallen significantly since a spike in 2022.
The Bank of England’s base rate, which influences the cost of borrowing for individuals, including mortgages, has fallen from 5.25% in 2024 to its current 4%.
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