Sector movers: Life insurers, Banks jump on report government may dial back stimulus plans

Life insurers and banks jumped on Thursday after Bloomberg reported that the government might walk back some of the tax cuts proposed by the Chancellor, Kwasi Kwarteng, during his mini-budget three weeks earlier.

According to a person familiar with the matter, the Treasury officials and No.10 were drafting options for the Prime Minister, although no final decision had yet been taken.

But that sufficed to push the yield on the benchmark 30-year Gilt down by about 26 basis points to 4.548%.

The report added to the positive momentum triggered overnight by news that the Bank of England had taken £4.56bn in offers for its emergency purchases, the largest single-day tally since it began intervening in the Gilt market on 28 September.

Sterling was higher alongside, climbing 2.41% to 1.1368, having earlier fallen as low as 1.1058.

Worth noting, there was also speculation that the Chancellor would be forced to quit his job, although Kwasi Kwarteng, who was in Washington D.C., said he was "not going anywhere".

Indeed, some traders noted his remarks that any turmoil "is a matter for the Governor [of the Bank of England]", prompting some analysts to wonder out loud early on Thursday if the BoE Governor would be made a scapegoat for the debacle in the Gilt market, which was in part due to the government's mini-budget.

Commenting on Kwarteng's remarks regarding the Governor, Neil Wilson, chief market analyst at Markets.com, said: "This is extremely unhelpful and points to the fiscal and monetary sides being at odds with each other. I am no fan of Bailey – too slow, too arrogant, not prepared to take the time to communicate well; but Kwarteng is a danger.

"Bailey is attempting to assert independence by sticking to this Friday deadline (a bluff?). Kwarteng knows that everyone knows the instability is down to the Budget, despite some shocking gaslighting from certain corners of the political spectrum and, far worse, certain commentators. So he wants to shift the blame for what is likely to come."

There was also speculation that the BoE would be forced to extend its emergency debt purchases beyond its self-imposed deadline of Friday.

Going the other way, precious metals miners were at the bottom of the pile after fresh data revealed that US core consumer price data for September hit a 40-year high.

Nevertheless, the initial strength in the US dollar, and selling pressure on precious metals, was arrested by the news out of London, which saw the Greenback reverse its gains.

Top performing sectors so far today

Life Insurance 5,840.85 +4.18%

Leisure Goods 15,052.34 +4.05%

Household Goods & Home Construction 8,810.27 +4.02%

Automobiles & Parts 1,054.94 +3.90%

Banks 2,923.41 +3.79%

Bottom performing sectors so far today

Precious Metals and Mining 9,062.09 -2.94%

Beverages 27,316.01 -2.81%

Personal Care, Drug and Grocery Stores 3,795.07 -2.40%

Pharmaceuticals & Biotechnology 18,392.62 -2.22%

Media 8,364.16 -1.77%