London midday: Stocks turn lower as focus shifts to US earnings

London stocks had turned lower by midday on Tuesday despite better-than-expected UK borrowing figures, as investors eyed key earnings from across the pond.

The FTSE 100 was down 0.3% at 7,468.32.

On the macro front, figures released earlier by the Office for National Statistics showed the government borrowed much less than expected last month.

Public sector borrowing, excluding banks, rose £7.8bn in December, which was below the £14.1bn economists were expecting. It was also £8.4bn below the amount borrowed a year earlier and marked the lowest borrowing for the month of December since 2019.

For the nine months to December, total public sector net borrowing came in at £119.1bn, which was £5bn below the £124.1bn forecast by the Office for Budget Responsibility.

Joshua Mahony, chief market analyst at Scope Markets, said: "The FTSE 100 has found itself on the back foot in early trade despite a welcome decline in UK public sector net borrowing for December. With government borrowing down from £12.8 billion to £6.8 billion, we are seeing a stronger fiscal position driven by improved tax receipts (up 5.3%) and reduced debt-interest costs (down 28%).

"With borrowing now down to the lowest December reading since 2019, Chancellor Jeremy Hunt will likely be preparing to lay out a more generous package of tax cuts in the upcoming March budget. While Hunt will undoubtedly look to help Rishi Sunak’s chance at this year’s general election, there is a fine balancing act required given the need to drive down the net debt figure, which has surged to 97.7% of UK GDP."

Investors were looking to the release of US earnings, with Procter & Gamble, Netflix, Verizon, Texas Instruments and General Electric results all on the cards.

In UK equity markets, heavily-weighted mining shares were up following a report that Chinese authorities are considering a package of measures aimed at stabilising the stock markets. According to Bloomberg, policymakers are looking to mobilise about 2 trillion yuan, mainly from the offshore accounts of Chinese state-owned enterprises, as part of a stabilisation fund to buy shares onshore through the Hong Kong exchange link.

Asia-focused Prudential and Standard Chartered also gained, with the former also benefiting from an upbeat note by JPMorgan.

Associated British Foods gained as it said sales at clothing retailer Primark grew 2.1% on a like-for-like basis over the Christmas period despite warmer weather. ABF also said it does not expect supply disruptions from attacks on commercial shipping in the Red Sea.

Mr Kipling and Bisto owner Premier Foods nudged down after saying it was on track to hit profit forecasts this year following a solid third quarter with double-digit sales growth across the group.

Crest Nicholson dipped as the housebuilder posted a bigger-than-expected fall in annual profits but said it was encouraged by an increase in customer inquiries as borrowing costs fell.

In broker note action, Rolls-Royce slid despite an upgrade to ‘overweight’ at JPMorgan, while Royal Mail parent IDS rose after an upgrade to ‘buy’ at HSBC.

Market Movers

FTSE 100 (UKX) 7,468.32 -0.26%
FTSE 250 (MCX) 19,101.35 0.13%
techMARK (TASX) 4,334.92 -0.21%

FTSE 100 - Risers

Ocado Group (OCDO) 580.40p 3.35%
Anglo American (AAL) 1,795.80p 2.55%
International Consolidated Airlines Group SA (CDI) (IAG) 148.45p 2.38%
Prudential (PRU) 813.00p 2.08%
JD Sports Fashion (JD.) 117.00p 2.01%
Standard Chartered (STAN) 592.00p 1.96%
Rio Tinto (RIO) 5,372.00p 1.59%
Associated British Foods (ABF) 2,304.00p 1.59%
Fresnillo (FRES) 485.30p 1.57%
Smurfit Kappa Group (CDI) (SKG) 2,918.00p 1.32%

FTSE 100 - Fallers

Rolls-Royce Holdings (RR.) 302.00p -2.23%
Compass Group (CPG) 2,118.00p -2.17%
AstraZeneca (AZN) 10,382.00p -1.96%
CRH (CDI) (CRH) 5,452.00p -1.66%
Flutter Entertainment (CDI) (FLTR) 15,410.00p -1.50%
Convatec Group (CTEC) 244.00p -1.45%
BAE Systems (BA.) 1,151.00p -1.41%
InterContinental Hotels Group (IHG) 7,394.00p -1.28%
London Stock Exchange Group (LSEG) 9,090.00p -1.26%
British American Tobacco (BATS) 2,306.50p -1.20%

FTSE 250 - Risers

NCC Group (NCC) 131.40p 5.80%
Indivior (INDV) 1,343.00p 5.33%
Mobico Group (MCG) 90.50p 4.81%
International Distributions Services (IDS) 265.90p 4.56%
Harbour Energy (HBR) 298.20p 3.87%
QinetiQ Group (QQ.) 349.00p 3.01%
Wizz Air Holdings (WIZZ) 1,871.50p 2.91%
OSB Group (OSB) 432.20p 2.71%
easyJet (EZJ) 509.80p 2.14%
Vistry Group (VTY) 953.00p 1.98%

FTSE 250 - Fallers

Carnival (CCL) 1,161.00p -4.05%
PZ Cussons (PZC) 134.40p -1.90%
Oxford Instruments (OXIG) 2,180.00p -1.80%
TBC Bank Group (TBCG) 2,915.00p -1.69%
Lancashire Holdings Limited (LRE) 590.50p -1.58%
Softcat (SCT) 1,389.00p -1.42%
Chemring Group (CHG) 351.50p -1.40%
Syncona Limited NPV (SYNC) 115.40p -1.37%
JPMorgan Indian Investment Trust (JII) 910.00p -1.30%
NB Private Equity Partners Ltd. (NBPE) 1,624.00p -1.22%