London stocks were still in the black by midday on Tuesday, with Kingfisher pacing the gains after a guidance upgrade, as investors eyed the latest US data and looked ahead to Wednesday's Budget.
The FTSE 100 was 0.2% higher at 9,557.28.

Derren Nathan, head of equity research at Hargreaves Lansdown, said the UK was bracing "for one of the most hotly anticipated Downing Street Budgets in recent history".

"If rumours of an imminent cut to the medium-term growth outlook by the Office for Budget Responsibility prove to be true, that makes the delicate balancing act of fiscal prudence and stimulating the economy more precarious than ever," he said.

Investors were also mulling the latest Distributive Trades survey from the Confederation of British Industry, which showed that sentiment among retailers fell in November at the sharpest rate in 17 years ahead of the Budget.

Looking to the rest of the day, the US producer price index and retail sales data for September are due at 1330 GMT, while the Conference Board consumer confidence index for November is at 1500 GMT.

Nathan said: "Today's attention will turn to key US economic data releases before traders start to wind down ahead of Thursday's Thanksgiving pause. Markets will be looking for further reassurance that the soft-landing narrative isn't gravitating in the direction of stagflation. But the public numbers coming out today are more backward looking than usual, delayed by the earlier US government shutdown.

"On the inflation side, September's producer price index is expected to have notched up a 0.3% increase after falling back 0.1% in August. Retail sales growth in September is expected to have slowed from 0.6% to 0.4% but the Conference Board's consumer confidence index (a drop of 1.1 points to 94.6 expected) will be a more relevant number as retailers start the countdown to Christmas.

"The other key piece of the puzzle is this week's rolling four-week employment report by ADP which at the last count showed job losses of 11,250 per week on average. There's a lot to process here but, in essence, it will need either a hotter-than-expected PPI number, or punchier read out on the demand and jobs front, to derail hopes of a further rate cut by the Fed in December, with futures now implying over an 80% chance of a quarter point drop next month."

In equity markets, B&Q owner Kingfisher was sitting pretty at the top of the FTSE 100 as it upgraded its full-year outlook despite market conditions softening in the UK and Poland during the third quarter. Profit guidance was lifted to between £540m to £570m, from £480m to £540m.

Banks also rallied with Lloyds, NatWest and Barclays all up after the Financial Times reported that Chancellor Reeves was preparing to spare the sector from a tax raid.

Online electricals retailer AO World surged to the top of the FTSE 250 as it lifted its full-year profit outlook following slightly better-than-expected trading in the first half.

Food producer Cranswick gained as it backed its full-year outlook, reporting a jump in interim profit, with revenue growth across all categories.

Hilton Foods rose as it said chief executive Steve Murrells was stepping down with immediate effect. The announcement came just over a month after shares tumbled as it warned that profit progression in the next financial year would be difficult.

On the downside, insurer Beazley tanked as it cut its forecast for growth in full-year insurance written premiums.

Intertek slumped after group organic growth for July to October came in slightly weaker than expected at 4.1%, versus consensus of 4.5%.

Low cost airline easyJet flew lower even as it upgraded forecasts for its holiday division after posting a 9% rise in full-year pre-tax earnings to a better-than-expected £655m.

Catering firm Compass dropped despite reporting strong underlying sales growth in the fiscal year to 30 September, driven by a solid performance in North America and good client retention.

Telecom Plus fell as it reported a near-30% plunge in adjusted earnings over the first half despite solid revenue growth, due to the re-phasing of energy costs across the financial year.

Domino's Pizza lost ground as it said chief executive Andrew Rennie was stepping down by mutual consent with immediate effect and that it was postponing its capital markets day scheduled for next month.

Baltic Classifieds was knocked lower by a downgrade to 'underweight' from 'overweight' at JPMorgan.

Morgan Advanced Materials was under the cosh after RBC Capital Markets downgraded the stock to 'sector perform' from 'outperform' and cut the price target to 210p from 250p.

Market Movers

FTSE 100 (UKX) 9,557.28 0.23%
FTSE 250 (MCX) 21,440.94 0.14%
techMARK (TASX) 5,497.27 -0.02%

FTSE 100 - Risers

Kingfisher (KGF) 307.30p 5.10%
Airtel Africa (AAF) 307.40p 3.99%
Antofagasta (ANTO) 2,662.00p 2.62%
Lloyds Banking Group (LLOY) 89.42p 2.33%
NATWEST GROUP (NWG) 594.80p 2.02%
Vodafone Group (VOD) 92.16p 1.97%
Anglo American (AAL) 2,787.00p 1.90%
Metlen Energy & Metals (MTLN) 43.85p 1.74%
BT Group (BT.A) 177.70p 1.46%
Barclays (BARC) 406.40p 1.45%

FTSE 100 - Fallers

Beazley (BEZ) 774.00p -10.00%
Intertek Group (ITRK) 4,642.00p -4.68%
easyJet (EZJ) 464.60p -3.29%
Compass Group (CPG) 2,389.00p -2.45%
International Consolidated Airlines Group SA (CDI) (IAG) 383.00p -1.74%
Croda International (CRDA) 2,723.00p -1.63%
Auto Trader Group (AUTO) 642.80p -1.56%
Pearson (PSON) 991.40p -1.55%
Hiscox Limited (DI) (HSX) 1,303.00p -1.36%
Fresnillo (FRES) 2,466.00p -1.28%

FTSE 250 - Risers

AO World (AO.) 105.20p 5.94%
Diversified Energy Company (DI) (DEC) 1,205.00p 5.52%
Oxford Nanopore Technologies (ONT) 143.80p 4.96%
Tate & Lyle (TATE) 368.80p 3.02%
Cranswick (CWK) 5,140.00p 2.90%
Hilton Food Group (HFG) 496.00p 2.69%
Pollen Street Group Limited (POLN) 948.00p 2.60%
Ceres Power Holdings (CWR) 332.80p 2.40%
Workspace Group (WKP) 369.50p 2.07%
ITV (ITV) 79.50p 2.05%

FTSE 250 - Fallers

Carnival (CCL) 1,734.50p -5.94%
Telecom Plus (TEP) 1,666.00p -4.36%
Aston Martin Lagonda Global Holdings (AML) 59.95p -4.31%
Baltic Classifieds Group (BCG) 223.50p -3.87%
Dr. Martens (DOCS) 70.95p -2.94%
Domino's Pizza Group (DOM) 166.00p -2.92%
Playtech (PTEC) 240.00p -2.83%
RHI Magnesita N.V. (DI) (RHIM) 2,350.00p -2.69%
Ocado Group (OCDO) 171.05p -2.26%
Morgan Advanced Materials (MGAM) 191.00p -2.15%