Last checked at 
(Alliance News) - Stock prices in London opened lower on Monday, though the pound was up, shortly after the UK government announced a U-turn to its tax cut plans for the highest earners.
The FTSE 100 index opened down 61.27 points, 0.9%, at 6,832.53. The FTSE 250 opened down 143.09 points, 0.8%, at 17,025.25, and the AIM All-Share opened down 0.99 points, 0.1% at 805.39.
The Cboe UK 100 opened down 0.7% at 684.64, the Cboe UK 250 opened down 0.1% at 14,642.49, and the Cboe Small Companies opened down 0.2% at 12,696.54.
In European equities on Monday, the CAC 40 in Paris opened down 1.2%, while the DAX 40 in Frankfurt opened down 1.3%.
Liz Truss and Kwasi Kwarteng have abandoned a plan to abolish the top rate of income tax for the highest earners in an astonishing U-turn.
The chancellor acknowledged that their desire to axe the 45% rate on earnings over GBP150,000 in a move to be paid for by borrowing had become a "distraction" amid widespread criticism.
He issued a statement, hours before he had been due to defend the plans at the Conservative Party conference, saying: "We are not proceeding with the abolition of the 45p tax rate."
"We get it, and we have listened," he added.
The U-turn will be seen as a massive blow to their authority, coming a little over a week after they were announced and just a month into Truss's premiership.
Sterling made a strong comeback from its recent lows. The pound was quoted at USD1.1208 at the London equities open Monday, compared to USD1.1149 at the close on Friday.
"The great Truss retreat on tax saw the pound surge briefly in value, jumping above USD1.12, up by around 1 per cent in a matter of minutes just after rumours swirled about the move," said Hargreaves Lansdown analyst Susannah Streeter.
"A big part of the questionable battle plan to try and stimulate growth is being ripped up, which may actually help calm the feverish rise in borrowing costs for companies, homeowners and the government. But the credibility of the government in providing a steady hand on the tiller at a time of such economic uncertainty has been lost, perhaps irrecoverably," Streeter continued.
The euro stood at USD0.9796 Monday, unchanged from USD0.9796.
Against the yen, the dollar was trading at JPY145.05, higher compared to JPY144.68 late Friday.
In London, Telecom Plus - which trades at Utility Warehouse - soared 21%.
The midcap multi-utility provider, after it said it expects annual profit "materially ahead" of current market expectations.
It cited stronger customer growth, as well as a reduction in previously-expected cost of multi-service discounts during the second half. It also noted a more positive outlook for energy affordability, stemming from the government's recent energy price cap.
Essentra jumped 16%.
The firm said Chief Executive Officer Paul Foreman has decided to step down at the end of 2022. Scott Fawcett, currently the manager of its components division, will take his place from the beginning of January.
The Milton Keynes, England-based components maker also agreed on the disposal of its Filters business for GBP262.1 million to a subsidiary of Centaury Management Ltd.
"This will provide Essentra Components with the flexibility to pursue value-creating organic and inorganic opportunities, including future bolt-on acquisitions," the firm said.
The sale of its Packaging business completed on Saturday, it noted.
The sales will make Essentra a "pure-play" components business, with a "healthy balance sheet". Essentra said that once the Filters sale is completed, it will return GBP150 million to shareholders through a special dividend.
easyjet shed 4.4% early Monday, after HSBC cut the stock to 'hold' from 'buy'.
Intellectual property firm Hipgnosis Songs Fund was 4.6% higher, after announcing a successful refinancing of its credit facilities. It entered into a revolving credit facility of USD700 million, to run for five years.
"In an increasingly unpredictable debt market, this deal materially reduces our interest margin and the swaps we hope to close imminently provide long term certainty and a stable platform to take advantage of our industry's tailwinds," CEO & Founder Merck Mercuriadis said.
In AIM, Tortilla Mexican Grill plunged 25%.
It said interim pretax profit shrunk to GBP264,052 from GBP2.6 million the year before, for the 26 weeks ended July 3.
"Sales over the summer period were more challenging than anticipated, due to a combination of train strikes, the heatwave, and pent-up consumer demand for overseas holidays," the Mexican restaurant owner explained.
Times remain tough with cost pressure still elevated, it noted.
The Nikkei 225 index in Tokyo closed 1.1% higher, while the S&P/ASX 200 in Sydney ended down 0.3%. In China, the Shanghai Composite was closed for National Day Golden Week. In Hong Kong, the Hang Seng in Hong Kong was down 1.0% in late trade.
Brent oil was quoted at USD87.32 a barrel at the London equities open Monday, up from USD86.35 late Friday.
Gold was quoted at USD1,662.84 an ounce at the London equities open Monday, lower against USD1,672.50 at the close on Friday.
Still to come on Monday's international economic events calendar, there are a slew of manufacturing PMI figures due, with Germany at 0855 BST, eurozone at 0900 BST, the UK at 0930 BST and the US at 1445 BST. The ISM manufacturing PMI is due at 1500 BST.
In Zurich, Credit Suisse was down 9.3% in early trade.
The Telegraph reported that the Bank of England has been monitoring developments at the financial services firm, liaising with Swiss banking watchdogs.
Credit Suisse moved to reassure its staff in the face of market turmoil and a stock price slide, Bloomberg reported on Friday.
In a memo, Chief Executive Officer Ulrich Koerner told staff that the Swiss bank has a "strong capital base and liquidity position".
Koerner told staff not to confuse its recent share price slide with a sign that the bank's day-to-day performance is weakening.
By Elizabeth Winter; elizabethwinter@alliancenews.com
Copyright 2022 Alliance News Limited. All Rights Reserved.