London midday: FTSE maintains gains as energy shares rally

London stocks were still firmly in the black by midday on Tuesday, with energy shares pacing the gains as oil prices recovered.

The FTSE 100 was up 0.6% at 7,418.57.

A grim outlook from the Organisation for Economic Co-operation and Development failed to dent the mood, after it warned that the UK economy will be the worst hit of all the G7 nations next year.

The OECD expects the UK economy to contract by 0.4% next year and to grow just 0.2% in 2024.

On the macroeconomic front, figures out earlier from the Office for National Statistics showed that public sector net borrowing excluding public sector banks - PSNB ex - was £13.5bn in October, up from October 2021’s £9.2bn, but well below consensus expectations of £21.0bn.

This marked the second month in a row that borrowing has exceeded last year’s monthly total and was the fourth highest October figure since records began in 1993.

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: "October’s high borrowing figure largely is a consequence of the government’s decision to shield households from most of the surge in energy prices.

"The Energy Bills Support Scheme cost the government £1.9bn in October, while the Energy Price Guarantee was the main driver of a £1.1bn rise in subsidies.

"Note that the costs of the Energy Bills Relief Scheme for businesses has not been included in October’s borrowing estimate, due to a lack of data so far. Social assistance payments also were £1.0bn higher than a year ago, reflecting the payment of some of the grants to help households with living costs announced in May."

In equity markets, Harbour Energy, BP and Shell all gushed higher as oil prices recovered after Saudi Arabia denied a report that it and other Opec countries were in talks about lifting output.

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: "Saudi Arabia has rebuffed those suggestions with the energy minister Prince Abdulaziz bin Salman suggesting the complete opposite scenario was more likely and that another production cut could be on the cards.

"With the oil price hovering around $87 a barrel amid expectations of falling demand it does offer some relief for consumers and companies who have had to cope with painful price spikes in the Spring and Summer being passed on."

BP got an added boost from an upgrade to ‘buy' at Citi, which said it was its "key buy" in Europe along with Repsol.

SSE was lifted by an upgrade to ‘outperform’ at RBC Capital Markets, while ConvaTec was higher after an initiation at ‘buy’ at Jefferies.

Cranswick jumped after the food producer said half-year profits fell, but posted a rise in sales as it worked to keep cost inflation under control.

Telecom Plus and Babcock also gained after half-year results.

On the downside, Vodafone was knocked lower by a downgrade to ‘underperform’ at Credit Suisse, while Severn Trent and building materials group CRH fell after their interim results.

TBC Bank tumbled after the European Bank for Reconstruction & Development sold 850,000 shares in the company in a placing.

Market Movers

FTSE 100 (UKX) 7,418.57 0.57%
FTSE 250 (MCX) 19,437.01 0.12%
techMARK (TASX) 4,401.57 -0.04%

FTSE 100 - Risers

Harbour Energy (HBR) 319.90p 6.81%
BP (BP.) 484.65p 5.72%
Entain (ENT) 1,363.50p 5.21%
Glencore (GLEN) 514.40p 3.53%
Shell (SHEL) 2,351.00p 3.43%
Frasers Group (FRAS) 850.50p 3.28%
Kingfisher (KGF) 251.50p 2.24%
B&M European Value Retail S.A. (DI) (BME) 409.80p 2.22%
SSE (SSE) 1,730.50p 2.09%
Antofagasta (ANTO) 1,332.00p 1.80%

FTSE 100 - Fallers

Vodafone Group (VOD) 95.08p -3.09%
Compass Group (CPG) 1,783.00p -2.25%
Hargreaves Lansdown (HL.) 819.40p -2.10%
Croda International (CRDA) 6,766.00p -1.97%
Airtel Africa (AAF) 117.50p -1.92%
Relx plc (REL) 2,290.00p -1.76%
Spirax-Sarco Engineering (SPX) 11,195.00p -1.58%
CRH (CDI) (CRH) 3,295.50p -1.47%
Convatec Group (CTEC) 229.60p -1.46%
Severn Trent (SVT) 2,719.00p -1.38%

FTSE 250 - Risers

Babcock International Group (BAB) 310.80p 7.17%
Tullow Oil (TLW) 45.46p 3.84%
Cranswick (CWK) 3,200.00p 3.69%
Balanced Commercial Property Trust Limited (BCPT) 94.50p 3.50%
Wood Group (John) (WG.) 161.15p 3.50%
Telecom Plus (TEP) 2,410.00p 3.21%
Oxford Instruments (OXIG) 2,145.00p 3.13%
Essentra (ESNT) 241.50p 2.99%
Just Group (JUST) 71.00p 2.97%
Energean (ENOG) 1,406.00p 2.85%

FTSE 250 - Fallers

TBC Bank Group (TBCG) 1,988.00p -12.42%
Petrofac Ltd. (PFC) 109.90p -7.41%
Wizz Air Holdings (WIZZ) 2,070.00p -7.06%
Petershill Partners (PHLL) 184.20p -6.12%
Virgin Money UK (VMUK) 160.00p -4.39%
Aston Martin Lagonda Global Holdings (AML) 123.05p -4.28%
easyJet (EZJ) 373.90p -3.58%
Diploma (DPLM) 2,774.00p -3.48%
Bridgepoint Group (Reg S) (BPT) 203.80p -3.23%
W.A.G Payment Solutions (WPS) 78.10p -2.38%