London close: Banking, defence stocks provide as investors await Budget

26th Oct 2026 16:24

(Sharecast News) - UK stocks performed strongly on Monday, helped by a rebound in the banking and defence sectors, as investors positioned ahead of Wednesday's all-important Autumn Budget.

The FTSE 100 finished the day up 0.7% at 10,767.33, tracking gains across European markets and Wall Street. The UK top-flight index had fallen in four of the five past sessions to finish last week down 1.8%.

"The FTSE 100 made a solid start to Budget week as oil prices eased back and despite weak trading across Asia," said AJ Bell investment director Russ Mould. "The key yardsticks for how markets are feeling about the UK ahead of Chancellor John Healey standing at the despatch box - the pound and Gilts - are holding steady two days out."

Market sentiment was boosted by falling oil prices, with Brent crude futures down 0.8% to $115.81 a barrel and WTI down 1.2% to $101.99. Oil prices had spiked at the end of last week amid growing fears Donald Trump would resume US attacks on Iran after the mid-term elections. But they eased off highs during Monday trading ahead of Tehran hosting senior officials from Saudi Arabia, Pakistan and Turkey for talks about regional security.

In an interview with Iranian state television, Ali Bagheri Kani, deputy secretary of Iran's Supreme National Security Council, said this week's visit could mark the beginning of efforts to build "a region characterised by stability, calm and progress", although he did not provide any further details. The continuing recovery in exports from the Middle East further supported the softening in oil prices.

Investors were also looking ahead towards Wednesday's Budget, the first from recently installed prime minister Andy Burnham and his chancellor John Healey. It is widely expected that Healey is set to announce a rise in the full state pension, which could drag around 1m pensioners into paying income tax. To avoid that, the Treasury is set to announce a rise in the tax-free allowance for low-income pensions to £13,036.

Reports that the Budget could include possible increases to defence spending gave stocks such as Rolls-Royce, Babcock and BAE Systems a big lift. Reports claimed Healey was expected to channel extra defence funding through public finance institutions, using the National Wealth Fund and British Business Bank to raise capital without breaching the government's fiscal rules.

Banks were also on the rise on the FTSE 100 as Gilt yields eased, with HSBC, Barclays and Standard Chartered putting in a solid performance.

Shares in Computacenter soared after the technology and services provider said it had delivered another stronger‑than‑expected quarter and lifted full‑year guidance. Computacenter reported an "excellent" third‑quarter showing, with technology sourcing revenues continuing to grow sharply, driven by hyperscale and neocloud demand in North America and the UK.

Sage Group was in the red after analysts at Canaccord Genuity downgraded the stock from 'buy' to 'hold' on Monday, but nudged their target price up from 1,135p to 1,230p, noting that the shares have rallied hard and now look fairly valued after a strong run through 2026.

Outside of the top-tier index, Man Group jumped after expanding its strategic relationship with Japan's Meiji Yasuda Insurance Company, nearly two years after the partnership was first announced. The insurer will increase its capital commitment to the British investment firm's investment strategies to ¥200bn (£940m) over the next three years, and the two parties will also work together to develop new products for the Japanese market.

Also higher was Molten Ventures after the venture capital firm - a specialist in high-growth tech companies - reported a significant uptick in net asset value alongside a number of successful exits during the first half.

Market Movers

FTSE 100 (UKX) 10,767.33 0.72%

FTSE 250 (MCX) 24,501.25 1.09%

techMARK (TASX) 6,314.91 1.47%

FTSE 100 - Risers

Computacenter (CCC) 5,190.00p 13.07%

Babcock International Group (BAB) 999.20p 6.39%

Rolls-Royce Holdings (RR.) 1,234.80p 6.06%

International Consolidated Airlines Group SA (CDI) (IAG) 411.40p 4.23%

BAE Systems (BA.) 2,012.00p 4.14%

Antofagasta (ANTO) 3,174.00p 4.13%

InterContinental Hotels Group (IHG) 167.20p 3.79%

3i Group (III) 2,371.00p 3.67%

Diploma (DPLM) 7,135.00p 3.56%

Melrose Industries (MRO) 468.50p 3.51%

FTSE 100 - Fallers

Experian (EXPN) 2,900.00p -6.69%

Autotrader Group (AUTO) 528.00p -2.62%

The Sage Group (SGE) 1,157.50p -2.49%

London Stock Exchange Group (LSEG) 9,340.00p -1.79%

SSE (SSE) 2,485.00p -1.47%

Smith & Nephew (SN.) 1,136.50p -1.43%

Relx plc (REL) 2,998.00p -1.35%

BP (BP.) 630.80p -1.21%

WPP (WPP) 393.70p -1.18%

Reckitt Benckiser Group (RKT) 5,484.00p -0.98%

FTSE 250 - Risers

Man Group (EMG) 334.40p 6.63%

Ceres Power Holdings (CWR) 272.20p 5.91%

NCC Group (NCC) 174.40p 5.70%

Applied Nutrition (APN) 295.00p 5.10%

QinetiQ Group (QQ.) 515.50p 4.73%

W.A.G Payment Solutions (EWG) 109.20p 4.20%

Renishaw (RSW) 5,375.00p 4.17%

Energean (ENOG) 765.00p 4.08%

Seraphim Space Investment Trust (SSIT) 180.60p 4.03%

Michael Page (PAGE) 214.80p 3.77%

FTSE 250 - Fallers

Trustpilot Group (TRST) 253.20p -5.59%

Utilico Emerging Markets Ltd (DI) (UEM) 276.00p -4.83%

Raspberry PI Holdings (RPI) 533.00p -2.56%

Playtech (PTEC) 363.60p -2.47%

Pollen Street Group Limited (POLN) 911.00p -1.83%

Diversified Energy Company (DI) (DEC) 1,082.00p -1.81%

3i Infrastructure (3IN) 386.00p -1.66%

Rightmove (RMV) 531.00p -1.41%

Syncona Limited NPV (SYNC) 126.20p -1.25%

Ocado Group (OCDO) 322.80p -1.04%