London stocks ended a mostly higher session little changed on Monday amid renewed expectations of a rate cut by the Federal Reserve next month, as investors eyed this week's Budget.
The FTSE 100 closed 0.05% lower at 9,534.91.

Stocks had traded higher for most of the session, boosted by comments on Friday from the head of the Federal Reserve Bank of New York, who said he sees scope for shortly reducing interest rates due to weakness in the labour market.

In a speech about inflation-targeting at a conference in Santiago, Chile, John Williams refrained from predicting when a rate cut would be appropriate, but said that he would support the move "in the near term".

"I still see room for a further adjustment in the near term to the target range for the federal-funds rate to move the stance of policy closer to the range of neutral," Williams said.

Joshua Mahony, chief market analyst at Scope Markets, said: "With the chance of a December rate cut jumping up to 75%, the tide appears to have turned in favour of additional easing next month. This week sees the release of both September and October core PCE inflation data, which will undoubtedly shed additional light on the Fed's thinking when taken alongside the likes of the durable goods, GDP, and personal spending figures.

"Coming hot off the heels of last week's mixed September jobs report, any particular signs of weakness are likely to be seen as a cause for optimism that we will see the Fed cut rates in December."

Equity gains were pared into the close, however, as investors looked to the Budget on Wednesday.

Patrick Munnelly at Tickmill Group, said: "Chancellor Rachel Reeves is reportedly planning to implement tax increases amounting to tens of billions of pounds, marking the second hike since the last election.

"This strategy aims to manage borrowing levels, prevent a bond market downturn, and boost welfare spending. Reeves is expected to honour her election promise not to raise income taxes, instead focusing on tax hikes in other areas."

On the corporate front, defence firms were under the cosh, with BAE Systems the biggest loser on the FTSE 100 after the US and Ukraine said they had created an "updated and refined peace framework" to end the war with Russia following weekend talks in Geneva.

Shares of Ukraine-based iron ore producer Ferrexpo rocketed, however, ending up nearly 20%.

Anglo American closed flat after BHP confirmed it is no longer pursuing a takeover of its rival that had threatened to wreck the latter's $57bn merger with Teck Resources.

BHP said a potential tie-up with Anglo, which would have created the world's largest copper producer, still had "strong strategic merits", but it is confident in its own organic growth strategy.

BHP had walked away from a previous approach in May 2024 after Anglo's board rejected three proposals from the larger group.

Precious metals miner Fresnillo shot higher, while gold miners Endeavour and Hochschild also gained as the price of the yellow metal rose.

AstraZeneca edged up after saying it will invest $2bn ramping up manufacturing facilities in Maryland, America.

IMI was a smidgen higher after it agreed to sell its Truflo Marine business to Fairbanks Morse Defense for an enterprise value of £225m.

Vistry advanced after Goldman Sachs initiated coverage of the housebuilder with a 'buy'. In a broader sector note in which it started coverage of five other housebuilders, Goldman said Vistry was well placed to capitalise on growth in the affordable housing sector. The bank said its preferred picks are Barratt Redrow, Persimmon and Vistry.

Trainline was the worst performer on the FTSE 250 after the government said rail fares in England will be frozen next year for the first time in 30 years.

Market Movers

FTSE 100 (UKX) 9,534.91 -0.05%
FTSE 250 (MCX) 21,411.58 0.23%
techMARK (TASX) 5,498.11 0.20%

FTSE 100 - Risers

Fresnillo (FRES) 2,498.00p 9.08%
easyJet (EZJ) 480.40p 3.58%
Standard Chartered (STAN) 1,606.50p 2.98%
International Consolidated Airlines Group SA (CDI) (IAG) 389.80p 2.77%
Glencore (GLEN) 343.45p 2.52%
CRH (CDI) (CRH) 8,530.00p 2.28%
The Sage Group (SGE) 1,088.50p 2.25%
Pershing Square Holdings Ltd NPV (PSH) 4,792.00p 2.22%
St James's Place (STJ) 1,261.50p 2.15%
Barclays (BARC) 400.60p 2.14%

FTSE 100 - Fallers

BAE Systems (BA.) 1,652.00p -3.56%
Airtel Africa (AAF) 295.60p -3.08%
Marks & Spencer Group (MKS) 324.50p -2.58%
Diageo (DGE) 1,729.00p -2.21%
SSE (SSE) 2,128.00p -2.21%
Imperial Brands (IMB) 3,158.00p -2.05%
Rightmove (RMV) 536.60p -2.01%
National Grid (NG.) 1,116.00p -1.98%
Coca-Cola Europacific Partners (DI) (CCEP) 6,820.00p -1.87%
Next (NXT) 13,700.00p -1.62%

FTSE 250 - Risers

Raspberry PI Holdings (RPI) 323.20p 4.87%
Trustpilot Group (TRST) 184.00p 4.49%
Endeavour Mining (EDV) 3,294.00p 4.17%
Ceres Power Holdings (CWR) 325.00p 4.10%
Vistry Group (VTY) 620.80p 4.06%
Wizz Air Holdings (WIZZ) 1,139.00p 3.83%
Oxford Nanopore Technologies (ONT) 137.00p 3.71%
Oxford Biomedica (OXB) 613.00p 3.55%
Hochschild Mining (HOC) 360.40p 3.15%
Allianz Technology Trust (ATT) 508.00p 3.15%

FTSE 250 - Fallers

Trainline (TRN) 237.60p -6.31%
PayPoint (PAY) 472.00p -5.79%
Ocado Group (OCDO) 175.00p -5.61%
Ithaca Energy (ITH) 195.20p -3.84%
C&C Group (CDI) (CCR) 124.70p -3.78%
Syncona Limited NPV (SYNC) 91.70p -3.47%
Tate & Lyle (TATE) 358.00p -3.45%
Bluefield Solar Income Fund Limited (BSIF) 68.60p -3.38%
Dunelm Group (DNLM) 1,050.00p -2.78%
W.A.G Payment Solutions (EWG) 91.80p -2.55%