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London open: FTSE edges down as borrowing jumps ahead of Budget
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.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
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| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Ck Infrastructure Holdings Limited | +2.70% | +14.70 | 558.20 |
| 2 |  |
Banco Santander S.a. | +2.40% | +9.00 | 383.50 |
| 3 |  |
International Consolidated Airlines Group S.a. | +0.93% | +2.00 | 216.10 |
| 4 |  |
Bae Systems Plc | +0.72% | +9.50 | 1,337.00 |
| 5 |  |
Antofagasta Plc | +0.55% | +10.00 | 1,825.00 |
| 6 |  |
Wheaton Precious Metals Corp. | +0.39% | +20.00 | 5,200.00 |
| 7 |  |
Lloyds Banking Group Plc | +0.26% | +0.16 | 61.96 |
| 8 |  |
Standard Chartered Plc | +0.22% | +1.80 | 838.40 |
| 9 |  |
Scottish Mortgage Investment Trust Plc | +0.21% | +1.80 | 848.00 |
| 10 |  |
Mondi Plc | +0.20% | +2.50 | 1,269.50 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
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| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Admiral Group Plc | -2.71% | -73.00 | 2,625.00 |
| 2 |  |
Ashtead Group Plc | -2.16% | -126.00 | 5,714.00 |
| 3 |  |
Diploma Plc | -1.97% | -86.00 | 4,286.00 |
| 4 |  |
National Grid Plc | -1.86% | -19.00 | 1,000.00 |
| 5 |  |
Woodside Energy Group Ltd | -1.73% | -22.00 | 1,252.00 |
| 6 |  |
Bt Group Plc | -1.71% | -2.50 | 143.45 |
| 7 |  |
Ferguson Enterprises Inc. | -1.68% | -260.00 | 15,200.00 |
| 8 |  |
Experian Plc | -1.49% | -58.00 | 3,822.00 |
| 9 |  |
Crh Plc | -1.38% | -98.00 | 7,012.00 |
| 10 |  |
Vodafone Group Plc | -1.34% | -1.00 | 73.50 |
US close: Stocks mixed as traders await more Q3 earnings
Wall Street stocks turned in a mixed performance on Monday as Q3 earnings season gets set to pick up steam.
At the close, the Dow Jones Industrial Average was down 0.80% at 42,931.60, while the S&P 500 lost 0.18% to 5,853.98 and the Nasdaq Composite saw out the session 0.27% firmer at 18,540.00.
The Dow closed 344.31 points lower on Monday, snapping a three-day winning streak and knocking the blue-chip index off its all-time high.
Although market participants seemingly remain optimistic that US stocks can continue to deliver a solid performance, investors were also dialled in on heightened tensions in the Middle East and the upcoming US general election.
No major corporate earnings were released on Monday, but Tesla, Coca-Cola, Boeing, T-Mobile, and IBM will all report their latest quarterly numbers before the end of the week.
On the macro front, the Conference Board said on Monday that its leading economic indicators fell by more than expected in September, down 0.5% month-on-month after August’s revised 0.3% drop.
Also in focus, the yield on the benchmark 10-year Treasury note rose almost 12 basis points to 4.19%, while the two-year note was up more than seven basis points at 4.036%.
Tuesday newspaper round-up: Influencers, Microsoft, Canal+
Britain’s financial watchdog has interviewed 20 social media influencers under caution, as it clamps down on “finfluencers” who may be touting financial services products illegally. The 20 were interviewed voluntarily using the Financial Conduct Authority’s criminal powers. Potential penalties include fines and imprisonment of up to two years. – Guardian
Microsoft is introducing autonomous artificial intelligence agents, or virtual employees, that can perform tasks such as handling client queries and identifying sales leads, as the tech sector strives to show investors that the AI boom can produce indispensable products. The US tech company is giving customers the ability to build their own AI agents as well as releasing 10 off-the-shelf bots that can carry out a range of roles including supply chain management and customer service. – Guardian
The French media giant behind the Paddington films is seeking a valuation of up to €8bn (£6.7bn) when it lists on the London Stock Exchange, which would make it the largest debut listing of the year. Canal+, which owns Paddington producer StudioCanal, is expected to appear on the LSE in mid-December as part of a spinout by its parent company Vivendi. City sources said the debut is likely to value Canal+ in a range between €6bn and €8bn – which would give the embattled market a much-needed boost. – Telegraph
Almost a third of UK businesses are calling for the government to support British trade by reducing Brexit-related regulations and red tape. A survey by Santander found that nearly three quarters (74 per cent) of businesses are confident they will grow in the next three years and 36 per cent are “very confident” about future growth, compared with just 22 per cent a year ago. – The Times
Dow Jones and the New York Post have filed a lawsuit against Perplexity, the artificial intelligence startup, for “shamelessly” ripping off their journalism for its search engine. The News Corp-owned publishers have alleged that Perplexity’s AI-generated “answer machine” has copied “vast” quantities of journalists’ work into its database. – The Times
