London open: FTSE edges down as borrowing jumps ahead of Budget

22nd Oct 2024 08:12

(Sharecast News) - London stocks edged lower on Tuesday as investors mulled the latest UK borrowing figures.

At 0850 BST, the FTSE 100 was down 0.2% at 8,299.86.

Derren Nathan, head of equity research at Hargreaves Lansdown, said: "The FTSE 100 has opened down this morning as a mix of continuing unrest in the Middle East and uncertainty over the US election casts a cautious shadow over markets."

Figures released earlier by the Office for National Statistics showed the government borrowing figure for last month was the third-highest September figure since monthly records began in January 1993.

Borrowing - which is the difference between public sector spending and income - came in at £16.6bn, up £2.1bn on the same month a year ago. The figure was higher than the Office for Budget Responsibility's forecast of £15.1bn but below the consensus forecast of £17.4bn.

The figures showed that borrowing in the year to September was £79.6bn, up £1.2bn on the same point last year and the third highest year-to-September borrowing since monthly records began.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: "The extent to which the Chancellor is stuck between a rock and a hard place has been made clear in the latest public finances figures. With tax receipts coming in higher than expected, the figure was a little lower than consensus, coming in at £16.6 billion for September. However, it was still higher than the forecasts from the Office for Budget Responsibility. So, spending on government services, to meet election promises will be tricky without hiking taxes.

"If she tweaks her fiscal rules too radically to create more headroom, she could risk a strop out in the bond markets, which could end up raising the government's borrowing costs further. It increases the likelihood of significant tax tinkering, and although it's likely that the Chancellor will ringfence investment funding from day-to-day spending in refreshed debt rules, she's likely to be relatively cautious in her approach."

In equity markets, InterContinental Hotels fell as it reported a jump 1.5% in third-quarter room revenue, as good business demand and strength in the US and EMEAA helped to offset a weaker performance in China.

Mike Ashley's Frasers lost ground after luxury handbag maker Mulberry rejected a second takeover proposal from the retail group, saying it was "untenable".

The luxury handbag maker announced on 1 October that it had rejected an £83m, or 130p a share proposal from Frasers, which already owns a 37% stake in the group. It said at the time that the proposal failed to recognise its "substantial future potential value".

On Tuesday, Mulberry said it was rejecting Frasers' sweetened £111m or 150p a share proposal, made on 11 October. This comes after major shareholder Challice said it had no intention of selling its 56.4% stake to Frasers Group despite the increased bid.

Hunting tumbled as energy services firm downgraded its full-year profit outlook.

On the upside, Morgan Sindall surged as it said full-year results were set to be "significantly ahead" of its previous expectations.

HSBC was little changed as it announced the appointment of Pam Kaur as group chief financial officer effective 1 January, and said it was restructuring its operations into four main business segments - Hong Kong, UK, Corporate and Institutional Banking, and International Wealth and Premier Banking.

Market Movers

FTSE 100 (UKX) 8,299.86 -0.22%

FTSE 250 (MCX) 20,903.20 -0.02%

techMARK (TASX) 4,782.33 0.06%

FTSE 100 - Risers

Fresnillo (FRES) 758.50p 1.47%

easyJet (EZJ) 513.40p 1.14%

International Consolidated Airlines Group SA (CDI) (IAG) 216.30p 1.03%

Sage Group (SGE) 1,036.00p 0.93%

Pershing Square Holdings Ltd NPV (PSH) 3,644.00p 0.77%

Mondi (MNDI) 1,276.50p 0.75%

Scottish Mortgage Inv Trust (SMT) 851.80p 0.66%

Entain (ENT) 711.40p 0.59%

Antofagasta (ANTO) 1,825.50p 0.58%

BAE Systems (BA.) 1,333.00p 0.41%

FTSE 100 - Fallers

InterContinental Hotels Group (IHG) 8,438.00p -1.49%

Admiral Group (ADM) 2,667.00p -1.15%

Diploma (DPLM) 4,322.00p -1.14%

Ashtead Group (AHT) 5,778.00p -1.06%

Vodafone Group (VOD) 73.74p -1.02%

CRH (CDI) (CRH) 7,042.00p -0.96%

B&M European Value Retail S.A. (DI) (BME) 401.90p -0.94%

BT Group (BT.A) 144.65p -0.89%

National Grid (NG.) 1,010.50p -0.83%

Centrica (CNA) 126.15p -0.79%

FTSE 250 - Risers

Morgan Sindall Group (MGNS) 3,580.00p 10.15%

W.A.G Payment Solutions (WPS) 84.00p 5.79%

Wizz Air Holdings (WIZZ) 1,207.00p 2.81%

Burberry Group (BRBY) 702.20p 2.63%

Keller Group (KLR) 1,674.00p 2.57%

Spirent Communications (SPT) 177.60p 2.36%

QinetiQ Group (QQ.) 473.80p 2.33%

Softcat (SCT) 1,569.00p 2.15%

Raspberry PI Holdings (RPI) 369.10p 1.96%

Kier Group (KIE) 149.60p 1.77%

FTSE 250 - Fallers

Helios Towers (HTWS) 105.40p -4.36%

CMC Markets (CMCX) 312.00p -2.19%

Me Group International (MEGP) 200.00p -1.96%

Greggs (GRG) 2,840.00p -1.53%

Ninety One (N91) 177.90p -1.44%

Baltic Classifieds Group (BCG) 318.00p -1.40%

JPMorgan Japanese Inv Trust (JFJ) 530.00p -1.30%

Hochschild Mining (HOC) 235.00p -1.26%

Sequoia Economic Infrastructure Income Fund Limited (SEQI) 78.50p -1.13%

JTC (JTC) 1,052.00p -1.13%