London stocks had dipped into the red by midday on Monday, with caution setting in as investors eyed the release of the first batch of US data since the government shutdown and third-quarter results from US chipmaker Nvidia this week.
The FTSE 100 was down 0.2% at 9,679.79, having fallen sharply on Friday on the back of Budget jitters, concerns about an AI bubble and growing doubts about a US rate cut in December. It was the worst one-day decline since 9 April, when markets were rattled by US President Donald Trump's tariff announcements.

Joshua Mahony, chief market analyst at Scope Markets, said: "This week finally sees the release of key US data, although Thursday's September jobs report looks to be one of the only missing pieces that will emerge from this blackout. Early estimates put the payrolls figure around 50k, rising from the August reading of 22k. From a market perspective, there is likely to be a 'bad news is good news' reaction, as traders hope to see the Fed shift onto a more proactive mindset once again.

"With appearances from Fed members Williams, Jefferson, and Waller up ahead, this week is likely to have a notable focus on whether the bank will continue to take a back seat amid economic and market concerns.

"However, the main event of the week will undoubtedly come in the form of the Nvidia earnings release, with the recent tech-led volatility highlighting how quickly sentiment can sour once valuation concerns start to see any level of justification. We have grown accustomed to earnings outperformance from Nvidia, but markets will need to see a perfect scorecard if we are to see valuation concerns cast aside once again."

On home shores, data from Rightmove showed that house prices fell in November as the spike in supply and mounting uncertainty around the Budget weighed heavily.

Average new seller asking prices fell 1.8%, a larger-than-usual decline for the time of year. It also reversed October's 0.3% uptick. Year-on-year, prices were 0.5% lower, leaving the national average asking price at £364,833.

Agreed sales in the year-to-date rose 4%.

The supply of houses coming to market - which had long lagged demand - has surged this year, giving buyers more power and depressing prices. However, the Budget was also proving a "distraction", Rightmove said.

It found sales agreed for homes priced at £2m and above had fallen sharply, down 13% year-on-year.

Speculation is rife that £2m-plus house sales could be subject to a new mansion tax, while other reports have mooted possible changes to stamp duty, which would affect homes sold for between £500,000 and £2m.

Rightmove's Collen Babcock said: "The Budget is a big distraction, and is later in the year than usual, with many would-be buyers waiting to see how their finances will be impacted.

"It appears the usual lull we'd see around Christmas time has arrived early this year, and sellers who are keen to move are having to work especially hard to entice buyers with competitive pricing."

In equity markets, advertising giant WPP rallied after The Times reported it has attracted takeover interest from France's Havas and private equity firms Apollo and KKR ahead of its demotion from the FTSE 100.

THG gained after the ecommerce group said its Myprotein brand has agreed a new partnership with American food giant Mars to collaborate on a new range of Snickers-flavoured protein powders.

Genuit tumbled as it downgraded its full-year earnings guidance, citing a moderation in market volumes since the first-half results, driven by purchasing uncertainty related to the upcoming Budget and current UK economic outlook.

Luxury fashion brand Burberry was under the cosh, along with airlines IAG and easyJet as the dispute between China and Japan over Taiwan escalated, with China telling its citizens not to travel to Japan. Burberry has significant exposure to China.

Elsewhere, HICL Infrastructure and The Renewables Infrastructure Group said they had agreed a merger to create the UK's largest listed infrastructure investment company with net assets in excess of £5.3bn.

The combination will see the reconstruction and voluntary winding up of TRIG, with TRIG's assets transferred to HICL in exchange for the issue of new HICL shares and cash.

HICL shares slid but TRIG was higher.