London midday: Stocks flat as investors digest borrowing figures, Haldane comments
London stocks were little changed as investors digested the latest UK borrowing figures and a disappointing set of results from banking giant HSBC, with the pound weaker on the back of comments by the Bank of England's Andy Haldane.
FTSE 100
8,302.70
08:05 07/10/24
At midday, the FTSE 100 was down 0.1% to 7,296.29, while the pound was trading 0.4% lower at $1.2411.
Sterling was hit by comments from BoE chief economist Andy Haldane – who was appearing alongside governor Mark Carney before the Treasury Select Committee – after he said a sharp rise in market expectations for an interest hike could tighten credit conditions and hurt the economy.
Meanwhile, Carney, who was being questioned on the Inflation Report, said the BoE expects the drop in the pound to push up inflation all the way until 2020.
Investors were also digesting data from the Office for National Statistics that showed a smaller-than-expected surplus last month.
UK public sector net borrowing was in surplus by £9.4bn in January – a key month for income tax receipts – up a touch from £9.1bn in the same month a year ago and the highest January surplus since 2000, but worse than consensus estimates for a £14bn surplus.
For the current financial year-to-date, public sector net borrowing fell by £13.6bn to £49.3bn compared with the same period in the previous financial year, which is the lowest YTD borrowing since the financial year ending January 2008.
Meanwhile, the government’s total debt pile rose to £1.7trn at the end of January, which is a £91.7bn increase since the end of January 2016, meaning Chancellor Philip Hammond is on track to meet his 2016/2017 fiscal targets.
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: "Borrowing remains on track to undershoot the OBR’s Autumn Statement forecast, despite January’s smaller-than-expected surplus."
On the corporate front, HSBC slumped after it reported a bigger-than-expected drop in annual profits. The largest company on the FTSE 100 delivered a reported profit before tax of $7.1bn that was down 62% on the prior year.
Other banks followed suit, with Standard Chartered and Royal Bank of Scotland also trading lower.
Anglo American was weaker despite saying it swung to a profit for the year to the end of December as commodity prices rose.
Mediclinic was in the red as it warned there will be a fall in revenue in its Middle East business.
Building materials firm Wolseley slipped as it announced it will merge its Swiss plumbing and heating business with Walter Meiro, a Swiss heating and ventilation and air conditioning distributor.
Galliford Try was on the back foot despite posting a rise in first-half revenue and profit and lifting its dividend.
Wood Group gushed lower after it reported a 16% drop in full-year revenue and a 62% decline in profit, and said it remains cautious on the near-term outlook.
Online electricals retailer AO World was under the cosh after Morgan Stanley downgraded it to ‘underweight’ from ‘equalweight’.
On the upside, miner BHP Billiton pushed higher after it more than doubled its interim dividend payout as it reported a massive jump in underlying profits which were underpinned by a recovery in commodity prices and demand from China.
InterContinental Hotels Group rallied after reporting a jump in full-year operating profit and saying it will return $400m to shareholders via a special dividend and share consolidation.
Outsourcer Capita reversed earlier losses to trade up after writing down the value of a number of historic contracts.
Aerospace and defence group Rolls-Royce was enjoying gains for the second day in a row after Goldman Sachs upgraded the stock on Monday.
WH Smith was boosted by an upgrade to ‘buy’ from Investec, while OneSavings was dragged lower by a downgrade from the same outfit.
Market Movers
FTSE 100 (UKX) 7,296.29 -0.05%
FTSE 250 (MCX) 18,762.28 0.09%
techMARK (TASX) 3,375.21 0.56%
FTSE 100 - Risers
Vodafone Group (VOD) 203.80p 2.67%
BP (BP.) 456.25p 2.48%
Rolls-Royce Holdings (RR.) 725.50p 2.47%
Sage Group (SGE) 645.00p 1.65%
CRH (CRH) 2,823.00p 1.40%
Capita (CPI) 521.00p 1.36%
Royal Dutch Shell 'A' (RDSA) 2,107.00p 1.30%
Persimmon (PSN) 2,026.00p 1.20%
Ashtead Group (AHT) 1,723.00p 1.17%
Royal Dutch Shell 'B' (RDSB) 2,195.00p 1.13%
FTSE 100 - Fallers
HSBC Holdings (HSBA) 665.40p -6.58%
Mediclinic International (MDC) 759.50p -5.30%
Hargreaves Lansdown (HL.) 1,326.00p -2.71%
Randgold Resources Ltd. (RRS) 7,305.00p -1.95%
Fresnillo (FRES) 1,508.00p -1.44%
Royal Bank of Scotland Group (RBS) 255.50p -1.31%
St James's Place (STJ) 1,090.00p -1.09%
Standard Chartered (STAN) 757.30p -1.01%
Smurfit Kappa Group (SKG) 2,226.00p -0.89%
Merlin Entertainments (MERL) 497.10p -0.88%
FTSE 250 - Risers
Essentra (ESNT) 505.50p 4.46%
WH Smith (SMWH) 1,679.00p 3.32%
Tullow Oil (TLW) 277.90p 3.31%
Henderson Group (HGG) 230.10p 2.63%
Vectura Group (VEC) 145.40p 2.39%
International Personal Finance (IPF) 187.00p 2.19%
Petra Diamonds Ltd.(DI) (PDL) 152.40p 2.14%
BGEO Group (BGEO) 2,979.00p 2.02%
Travis Perkins (TPK) 1,546.00p 1.98%
Howden Joinery Group (HWDN) 422.40p 1.91%
FTSE 250 - Fallers
Wood Group (John) (WG.) 755.00p -7.70%
AO World (AO.) 153.60p -4.00%
Redefine International (RDI) 36.19p -3.31%
OneSavings Bank (OSB) 387.60p -2.78%
Aldermore Group (ALD) 229.90p -2.46%
Ascential (ASCL) 309.80p -2.24%
Vedanta Resources (VED) 1,012.00p -2.13%
Shawbrook Group (SHAW) 261.80p -2.02%
Entertainment One Limited (ETO) 240.90p -1.67%
Hochschild Mining (HOC) 270.00p -1.57%