London pre-open: Stocks seen down as investors mull borrowing data

(Sharecast News) - London stocks were set to fall at the open on Tuesday following a downbeat Asian session, as investors mulled the latest UK borrowing figures. The FTSE 100 was called to open 10 points lower at 8,004.

Data out earlier from the Office for National Statistics showed that the budget surplus narrowed sharply in January.

The Treasury recorded a surplus of £5.4bn borrowing, versus expectations for a £7.8bn deficit. This was down £7.1bn compared to January 2022.

The data showed that self-assessed income tax receipts hit a record of £21.9bn - the highest January figure since monthly records began in April 1999 and up £5.5bn on January 2022.

Capital Economics said: "January's public finances figures suggest the Chancellor may have scope for some giveaways in his Budget on 15th March.

"But with the OBR poised to slash its medium-term economic growth forecasts, any hopes the Chancellor might be able to give away a significant amount of money, while sticking to his previous debt-reduction plans, may be disappointed."

Still to come, UK services and manufacturing PMIs for February are due at 0930 GMT.

In corporate news, HSBC said quarterly profits almost doubled, driven by the rise in global interest rates, and unveiled a special dividend.

The Asia-focused bank reported pretax earnings of $5.2bn, up from $2.7bn and ahead of the $4.96bn company-compiled average.

Annual expected credit losses rose to $3.6bn, more than forecasts of $3.2bn, due to rising inflation and China's struggling property market.

Full-year profit fell to $17.5bn from $18.9bn, largely down to a $2.4bn charge on the sale of its retail banking operations in France.

Elsewhere, Smith & Nephew reported full-year revenue of $5.22bn (£4.35bn), showing a 4.7% increase on an underlying basis, but only 0.1% reported growth due to currency headwinds.

The FTSE 100 medical device firm's trading profit was $901m, with a margin of 17.3% as a result of higher inflation. Cash generated from operations was $581m, and the company completed $150m of its share buyback programme. The full-year dividend remained unchanged at 37.5 US cents per share.