The London market heads into Thursday’s open with investors caught between relief on UK inflation, nerves about a high‑stakes budget and global caution around Nvidia’s earnings and the Federal Reserve. Here’s a concise playbook for what’s likely to matter most when the FTSE 100 bell rings on 20 November 2025.
1. FTSE 100 Extends Losing Streak as Defence and Banks Drag
The FTSE 100 closed around 0.4–0.5% lower on Wednesday, near the 9,500 mark, its fifth consecutive daily loss and a four‑week low. [1]
Key themes from Wednesday’s session:
- Defence names under pressure
Aerospace and defence stocks dropped about 2%, with BAE Systems tumbling roughly 4.5% and Babcock International and Rolls‑Royce also weaker. [2]
This followed reports of renewed U.S. efforts to broker an end to the Russia‑Ukraine war, which weighed on European defence names and eroded some of this year’s outsized gains. [3] - Banks on a five‑day slide
The UK banking sector fell about 0.7% and has now declined for five straight sessions, reflecting concerns about both the upcoming UK budget and the interest‑rate outlook. [4] - Energy joins the downside
Lower oil prices pulled on FTSE heavyweights, with Shell and BP slipping as Brent crude fell more than 2% amid renewed diplomatic moves to end the Ukraine war and worries about oversupply. [5]
There were bright spots:
- WH Smith jumped more than 7% after announcing CEO Carl Cowling had stepped down following an independent review that uncovered accounting failures in its U.S. operations. [6]
- Sage Group gained about 1% after reporting better‑than‑expected annual operating profit. [7]
- In the FTSE 250, Workspace Group fell over 5% after reporting a 4% drop in property valuations in the first half of 2025. [8]
In short: the London market is entering Thursday’s session from a position of weakness, with risk appetite fragile and cyclicals particularly sensitive.
2. UK Inflation Cools to 3.6% – December BoE Rate Cut Now the Base Case
The single most important domestic development on Wednesday was the October CPI report:
- Headline CPI slowed to 3.6% in October from 3.8% in September – the first decline since May and in line with Bank of England and consensus forecasts. [9]
- Core CPI eased to 3.4%, while services inflation – a key gauge for the BoE – dipped to 4.5%, its lowest since December 2024. [10]
- Offsetting that good news, food and drink inflation picked back up to 4.9%. [11]
Markets reacted quickly:
- Sterling weakened modestly against the dollar.
- Two‑year gilt yields fell.
- Interest‑rate futures and swaps now imply roughly an 80–85% chance that the BoE cuts Bank Rate from 4.0% to 3.75% in December, up sharply from earlier in the month. [12]
Analysts argue that with inflation on a clear cooling path, growth softening and fiscal tightening likely in next week’s budget, the conditions are “in place” for a December move – though a narrow 5–4 vote against a cut in November means it isn’t guaranteed. [13]
Why it matters for Thursday’s open
- Lower rate expectations tend to support utilities, housebuilders and domestically focused mid‑caps, while potentially pressuring the pound. [14]
- Rate‑sensitive financials, especially banks and insurers, may stay volatile as investors re‑price margins and loan‑loss assumptions.
3. High‑Stakes UK Budget and Market Structure Reform in the Background
Markets are already looking beyond the next session to the UK budget on 26 November, which has become a key event for gilts, equities and sterling. [15]
A few points shaping sentiment:
- Investors are demanding fiscal credibility after being rattled by signals that Chancellor Rachel Reeves may rule out income‑tax rises despite pressures to rebuild fiscal headroom. [16]
- Analysts warn that if revenue measures are too light, the government could be seen as prioritising short‑term politics over long‑term consolidation, with implications for gilt yields and the pound. [17]
- Barclays and others flag that a supportive budget and lower yields could particularly help FTSE 250 sectors such as housebuilders, food retailers and utilities, while any new levies on alcohol, gambling or tobacco could hit select consumer names. [18]
On the structural front, the Financial Conduct Authority (FCA) launched a consultation on a “consolidated tape” for UK equity markets – a unified real‑time feed of trade data across venues, targeted for 2027. [19]
- The aim is to improve transparency and liquidity and encourage more listings in London post‑Brexit.
- Some industry participants welcome the move; others question whether the benefits justify the cost.
While these themes won’t move prices tick‑by‑tick on Thursday morning, they’re shaping medium‑term positioning in UK banks, domestically focused stocks and LSE‑linked plays.
4. Global Backdrop: Nvidia, Fed Minutes and a Fragile Risk Mood
Globally, the tone remains cautious:
- After a sharp selloff earlier this week, stocks have steadied, with S&P 500 futures up about 0.3% and European indices wavering as traders wait for Nvidia’s earnings – seen as a major test of the AI‑driven rally in big tech. [20]
- The S&P 500 is still down more than 3% this month, while volatility (VIX) has pushed above 24, signalling elevated anxiety. [21]
In Asia on Wednesday:
- The MSCI Asia Pacific index slipped around 0.1% after its biggest drop since early April, with markets swinging between small gains and losses. [22]
- Investors are watching whether the region can stabilise after Wall Street’s losses and ahead of key U.S. data.
On the central‑bank side, the focus is squarely on the Federal Reserve:
- Minutes of the 28–29 October FOMC meeting – when the Fed cut rates by 25 bps to a 3.75–4.00% range in a rare 10–2 split – are being dissected for signs of just how divided policymakers are. [23]
- With U.S. data delayed by a historic government shutdown, officials have been operating with limited visibility, and markets currently see only about a 50% chance of another cut in December. [24]
Takeaway for London traders
- If Nvidia’s results or the Fed minutes are perceived as negative for risk, futures and Asian markets could set a weak tone for the FTSE at the open.
- Conversely, a “Goldilocks” outcome – decent Nvidia guidance and a cautious‑but‑not‑panicked Fed – could help global risk assets stage a short‑term rebound.
5. Oil, Commodities and Crypto: Lower Brent, Firmer Gold, Busy Bitcoin
Oil
Brent crude fell about 2.5% on Wednesday to the low $63s per barrel after reports that the U.S. is renewing its push for a framework to end the Russia‑Ukraine war, which would reduce the perceived risk premium in energy markets. [25]
- Any path to higher Russian exports adds to existing oversupply concerns, even as sanctions on Rosneft and Lukoil continue to bite. [26]
For the FTSE, that:
- Pressures oil majors and energy services stocks, but
- Helps ease input costs for energy‑intensive industries and supports the broader disinflation narrative.
Gold and miners
Gold has firmed again after briefly slipping, benefiting from risk aversion and falling bond yields; precious‑metal miners in London rallied around 3% on Wednesday. [27]
Bitcoin and London’s new crypto product
- Bitcoin has stabilised around the low‑$90,000 area after a brief dip below $90,000, adding to volatility but not yet triggering broader contagion. [28]
- In a notable development for the City, iShares Digital Assets AG will issue 820,000 new securities of its iShares Bitcoin ETP (ticker: IB1T) on the London Stock Exchange, with trading on this new tranche set to begin Thursday 20 November. Each security provides fractional exposure to Bitcoin without direct custody. [29]
That expansion underscores London’s push to remain relevant in digital‑asset investing and could draw incremental flows into LSE‑listed crypto products.
6. Sterling and Rates: Pound Softer as Rate‑Cut Bets Build
The pound weakened on Wednesday:
- GBP/USD traded around 1.305–1.31, down roughly 0.5% on the day, touching its lowest level in about a week. [30]
- The euro climbed to about £0.88, near multi‑month highs, as investors increasingly view sterling as the pressure point if the budget disappoints. [31]
Currency strategists note that:
- Cooling inflation and high odds of a BoE cut in December are weighing on the pound. [32]
- Budget risk on 26 November remains a key driver – any sign of weaker fiscal discipline could hit sterling further.
For equity investors, a softer pound tends to support FTSE 100 multinationals with large overseas earnings, while being less helpful – or even negative – for domestically focused small and mid‑caps.
7. Company Stories to Watch in London
A number of stock‑specific catalysts from Wednesday could continue to play out when trading resumes.
Smiths Group: Solid Q1 and a £1 Billion Buyback
Smiths Group issued its Q1 FY2026 trading update, reporting:
- Organic revenue growth of +3.5% for continuing operations in the three months to 31 October.
- Full‑year guidance reaffirmed for 4–6% organic revenue growth and ongoing margin expansion. [33]
Crucially, Smiths also:
- Announced a new £1 billion share buyback, to begin after its existing £500 million programme finishes in December 2025 and targeted for completion by the end of 2026. [34]
Investors will be watching for follow‑through buying in Smiths as the market prices in the enlarged capital‑return story and portfolio simplification.
WH Smith: CEO Exit After Accounting Failures in U.S. Unit
Travel retailer WH Smith surged after revealing CEO Carl Cowling had stepped down following an independent review that identified accounting failures at its U.S. operations. [35]
- The company said trading remains robust, but governance and oversight questions will linger.
- Expect continued focus on any further disclosures and on the board’s search for leadership continuity.
Other Movers
- Sage Group: Better‑than‑expected annual operating profit, with investors focusing on recurring‑revenue strength. [36]
- Workspace Group: Decline in property valuations raises questions about London office demand and the broader commercial real‑estate outlook. [37]
8. Thursday 20 November: Key Corporate and Economic Events
UK Corporate Diary
According to the latest UK earnings and trading statements calendar, a busy slate of results is due on Thursday 20 November, including: [38]
- CMC Markets – Half‑year results
- Dr Martens – Half‑year results
- Grainger – Full‑year results
- Halma – Half‑year results
- Investec (PLC & Ltd) – Half‑year results
- JD Sports Fashion – Trading statement
- Johnson Matthey – Half‑year results
- Liontrust Asset Management – Half‑year results
- Lion Finance Group – Q3 results
- LondonMetric Property – Half‑year results
- MHA – Half‑year results
- Mitie Group – Half‑year results
These names span financials, property, industrials, speciality chemicals and retail, so pre‑market statements could set the tone for several sectors.
UK Data: ONS High‑Frequency Indicators
At 09:30 (UK time), the Office for National Statistics will release a cluster of reports, including: [39]
- Economic activity and social change in the UK, real‑time indicators
- Business insights and impact on the UK economy
- Young people not in education, employment or training (NEET)
- Business demography 2024
While not as market‑moving as CPI, these releases provide timely insight into business conditions, labour‑market slack and underlying momentum – important context ahead of the budget and Friday’s retail‑sales and public‑finance data.
International Macro: U.S. and Japan
From the Scotiabank November calendar: [40]
- In the U.S. on Thursday:
- Philadelphia Fed manufacturing index (Nov) – 08:30 ET
- Conference Board Leading Indicators (Oct) – 10:00 ET
- Existing home sales (Oct) – 10:00 ET
- In Japan:
- October CPI is due Thursday evening local time, which markets will digest into Friday’s Asia session.
These releases will help shape global risk appetite through Thursday’s U.S. session and into Friday’s Asian trading, feeding back into UK assets.
9. Trading Playbook: What to Watch at the FTSE Open
Heading into the London open on 20 November 2025, here are the big picture points:
- Trend
- The FTSE 100 enters the day on a five‑session losing streak near 9,500, as global risk sentiment has soured on tech valuations and rate uncertainty. [41]
- Macro drivers
- Global risk
- Markets are finely balanced around Nvidia’s earnings and the Fed minutes; any decisive “risk‑on” or “risk‑off” move overnight will likely show up immediately in FTSE futures and at the cash open. [44]
- Sectors and stocks
- Watch defence and energy after oil’s slide and talk of a possible Ukraine peace framework. [45]
- Follow‑through moves are likely in Smiths Group, WH Smith, Sage, Workspace and other names with fresh news. [46]
- Crypto‑linked sentiment around the IB1T Bitcoin ETP could add incremental interest to London’s exchange‑traded product market. [47]
- Diary risk
- A dense UK corporate calendar, plus ONS real‑time indicators and key U.S. data later in the day, mean headline risk will remain elevated throughout Thursday’s session. [48]
This article is for information purposes only and does not constitute investment advice or a recommendation to buy or sell any financial instrument. Always do your own research or consult a qualified adviser before making trading or investment decisions.
References
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