London open: Stocks steady as sterling gains
London stocks were steady in early trade on Tuesday, held back by a strong pound, as investors digested the latest UK borrowing figures.
At 0900 BST, the FTSE 100 was flat at 7,053.45, while sterling was 0.3% higher against the dollar at 1.4193.
Data released earlier by the Office for National Statistics showed that government borrowing fell in April but remained at its second highest level on record for the month.
Public sector borrowing was £31.7bn, down £15.6bn from the same month last year and marking the first annual fall since the start of the pandemic. The amount was comfortably below the Office for Budget Responsibility’s forecast of £39bn and consensus expectations of £32.4bn.
Still, borrowing remains at its second highest April level since records began in 1993.
Meanwhile, the ONS estimate of borrowing in 2020/21 was revised down to £300.3bn from £303.1bn .This is well below the £354.6bn forecast by the OBR in March’s Budget but still the highest borrowing since financial year records began in March 1946.
The figures also showed that April tax receipts were up 7% on the year to £58bn, while central government bodies spent £95.9bn, down 11.9% from April 2020.
Spreadex analyst Connor Campbell said: "A better-than-forecast, but still second highest ever, UK borrowing figure for April failed to move the needle for the FTSE on Tuesday.
"The UK index was unchanged after the bell, flat just a touch above 7,050. A smattering of losses for some of its key stocks - Shell slipped 0.6%, as did Standard Chartered, AstraZeneca and GlaxoSmithKline - contributed to an overall lifeless start to trading.
"It didn’t help that the pound continued to make inroads against the dollar, adding another 0.2% to cross $1.419. If cable can maintain that slender growth all the way until the end of the day, it will achieve its best close in over three years."
In equity markets, Aveva was the standout gainer on the FTSE 100 after the industrial software company said trading had normalised in most of its markets from the impact of Covid-19, and that the outlook remained in line with expectations.
Wagamama owner Restaurant Group rallied after saying it had seen an encouraging recovery in sales since Covid-19 restrictions had been lifted, while Royal Mail was boosted by an upgrade to ‘buy’ at Peel Hunt.
On the downside, convenience food group Greencore lost ground after saying it swung to a loss in the first half as Covid-related restrictions and lockdowns dented revenues.
Smiths Group was in the red after it appointed former 3M executive Paul Keel as it new chief executive officer.
Provident Financial was weaker as guarantor lender Amigo Holdings tanked after the High Court rejected its rescue plan.
Market Movers
FTSE 100 (UKX) 7,053.45 0.03%
FTSE 250 (MCX) 22,562.91 0.35%
techMARK (TASX) 4,338.31 0.19%
FTSE 100 - Risers
Aveva Group (AVV) 3,435.00p 4.89%
Just Eat Takeaway.Com N.V. (CDI) (JET) 6,349.00p 2.55%
International Consolidated Airlines Group SA (CDI) (IAG) 200.15p 1.59%
SEGRO (SGRO) 1,048.00p 1.50%
Ocado Group (OCDO) 1,991.00p 1.45%
Land Securities Group (LAND) 721.60p 1.15%
Renishaw (RSW) 5,435.00p 1.12%
Rightmove (RMV) 598.00p 1.01%
London Stock Exchange Group (LSEG) 7,606.00p 0.88%
JD Sports Fashion (JD.) 920.80p 0.81%
FTSE 100 - Fallers
Pearson (PSON) 837.80p -0.99%
Pershing Square Holdings Ltd NPV (PSH) 2,585.00p -0.96%
Smiths Group (SMIN) 1,545.00p -0.93%
Vodafone Group (VOD) 128.32p -0.82%
Royal Dutch Shell 'B' (RDSB) 1,342.00p -0.62%
Burberry Group (BRBY) 2,103.00p -0.61%
Associated British Foods (ABF) 2,316.00p -0.60%
M&G (MNG) 237.10p -0.59%
Aviva (AV.) 403.40p -0.57%
AstraZeneca (AZN) 8,104.00p -0.56%
FTSE 250 - Risers
Royal Mail (RMG) 575.20p 4.58%
Elementis (ELM) 157.00p 3.29%
Future (FUTR) 2,796.00p 2.79%
Impax Environmental Markets (IEM) 470.00p 2.62%
Just Eat Takeaway.Com N.V. (CDI) (JET) 6,349.00p 2.55%
Investec (INVP) 288.90p 2.41%
Fidelity China Special Situations (FCSS) 413.50p 2.35%
Premier Foods (PFD) 110.00p 2.23%
Wizz Air Holdings (WIZZ) 4,680.00p 2.14%
AO World (AO.) 264.80p 2.00%
FTSE 250 - Fallers
Greencore Group (CDI) (GNC) 150.00p -12.18%
Trainline (TRN) 283.20p -4.65%
Avon Rubber (AVON) 3,124.00p -4.41%
Provident Financial (PFG) 249.00p -3.86%
Electrocomponents (ECM) 1,013.00p -2.69%
TUI AG Reg Shs (DI) (TUI) 432.60p -1.32%
Drax Group (DRX) 437.80p -1.26%
Oxford Instruments (OXIG) 2,020.00p -0.98%
Britvic (BVIC) 929.00p -0.85%
PZ Cussons (PZC) 256.00p -0.78%