London open: Stocks recover after positive Wall St close
By Michele Maatouk
Date: Tuesday 25 Jan 2022
(Sharecast News) - London stocks rose in early trade on Tuesday, recovering from heavy losses in the previous session and taking their cue from a positive close on Wall Street.
At 0830 GMT, the FTSE 100 was up 0.7% at 7,344.57, having slumped 2.6% on Monday amid growing tensions between Russia and Ukraine.
Investors were digesting the latest figures from the Office for National Statistics, which showed that government borrowing fell more than expected in December thanks to improved tax revenues.
Public sector net borrowing, excluding state banks, fell by £7.6bn from December 2020 to £16.8bn, coming in below consensus expectations of £18.5bn, as tax receipts rose. This marked the fourth-highest December borrowing figure since monthly records began in 1993.
Tax receipts were up £6.2bn on the year, while government spending fell £1bn to £86.7bn. Meanwhile, interest payments increased by £5.4bn on the year to £8.1bn in December.
For the 2021/22 financial year so far, Britain has borrowed £146.8bn, down £129.3bn from the same period a year ago.
Bethany Beckett, UK economist at Capital Economics, said public sector net borrowing in December was broadly in line with the Office for Budget Responsibility's forecast from last October. "But, with inflation set to keep pushing higher until April, borrowing is likely to return to overshooting the OBR's forecast in the coming months."
Market participants were eyeing the latest policy announcement from the US Federal Reserve due on Wednesday.
Richard Hunter, head of markets at Interactive Investor, said: "An increasingly hawkish Federal Reserve is expected to be confirmed with a wind down of easing and an indication of interest rate hikes largely expected. At the same time, the persistently high level of inflation at present has led some observers to wonder whether the Fed is actually behind the curve, and whether any monetary tightening could be even more harsh than anticipated.
"More positively, the message may be delivered to reflect the likely improvement in economic fortunes as the variant subsides, allowing the recovery to resume and with the possibility of full employment, thus easing some of the inflationary concerns. Equally, the falls seen this year are enough to tempt in some buyers on the dips, on the basis of easing supply chain blockages and what is still hoped will be a strong earnings season."
In equity markets, Royal Mail rallied even as it said it was axing 700 managers at a cost of £70m, and lowered its annual profit outlook.
Capricorn Energy was also trading up after saying it was "very encouraged" by the initial operating performance of its newly-acquired Western Desert Assets in Egypt, with production growth ahead of expectations.
On the downside, Unilever lost ground following reports the consumer goods giant is planning to slash thousands of jobs after its failed £50bn bid for GlaxoSmithKline's consumer healthcare arm.
Market Movers
FTSE 100 (UKX) 7,344.57 0.65%
FTSE 250 (MCX) 21,584.12 0.61%
techMARK (TASX) 4,359.38 0.62%
FTSE 100 - Risers
Royal Mail (RMG) 451.30p 3.37%
Flutter Entertainment (CDI) (FLTR) 10,795.00p 2.37%
Polymetal International (POLY) 1,158.50p 2.34%
Scottish Mortgage Inv Trust (SMT) 1,037.50p 2.27%
Standard Chartered (STAN) 497.20p 1.91%
Anglo American (AAL) 3,281.50p 1.88%
JD Sports Fashion (JD.) 186.30p 1.86%
Pershing Square Holdings Ltd NPV (PSH) 2,640.00p 1.73%
Lloyds Banking Group (LLOY) 50.09p 1.66%
3i Group (III) 1,320.00p 1.66%
FTSE 100 - Fallers
Spirax-Sarco Engineering (SPX) 12,575.00p -0.91%
Unilever (ULVR) 3,908.00p -0.90%
National Grid (NG.) 1,071.00p -0.74%
GlaxoSmithKline (GSK) 1,603.00p -0.72%
British American Tobacco (BATS) 3,172.50p -0.38%
WPP (WPP) 1,140.00p -0.35%
Imperial Brands (IMB) 1,730.00p -0.35%
Bunzl (BNZL) 2,697.00p -0.07%
Severn Trent (SVT) 2,884.00p -0.03%
United Utilities Group (UU.) 1,059.00p 0.00%
FTSE 250 - Risers
Capricorn Energy (CNE) 194.60p 4.23%
Cineworld Group (CINE) 39.84p 4.02%
Smithson Investment Trust (SSON) 1,622.00p 3.71%
BB Healthcare Trust (Red) (BBH) 169.00p 3.43%
Trustpilot Group (TRST) 198.70p 2.74%
Impax Environmental Markets (IEM) 425.50p 2.65%
Baillie Gifford US Growth Trust (USA) 218.50p 2.58%
IP Group (IPO) 96.70p 2.44%
Ferrexpo (FXPO) 239.60p 2.39%
Drax Group (DRX) 576.50p 2.31%
FTSE 250 - Fallers
Fidelity China Special Situations (FCSS) 298.00p -2.13%
Ibstock (IBST) 192.50p -1.43%
JPMorgan Japanese Inv Trust (JFJ) 564.00p -1.40%
Homeserve (HSV) 767.00p -1.22%
TBC Bank Group (TBCG) 1,410.00p -1.12%
Network International Holdings (NETW) 270.20p -1.10%
PZ Cussons (PZC) 194.20p -0.61%
Elementis (ELM) 137.00p -0.51%
Petershill Partners (PHLL) 216.00p -0.46%
Morgan Advanced Materials (MGAM) 327.00p -0.46%
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