London open: FTSE edges lower despite better-than-expected borrowing data

(Sharecast News) - London stocks edged lower in early trade on Tuesday despite better-than-expected UK borrowing figures, with a cautious outlook from HSBC weighing on the mood. At 0840 GMT, the FTSE 100 was down 0.2% at 7,998.26.

Data released earlier by the Office for National Statistics showed the government unexpectedly recorded a budget surplus in January as self-assessment income tax receipts surged.

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

The Office for Budget Responsibility had been expecting a £0.4bn surplus.

Self-assessment 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.

The figures also showed that interest on government debt reached £6.7bn in January, the highest amount for the month since records began in 1997.

Ruth Gregory, deputy chief UK economist at 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 equity markets, InterContinental Hotels was in the red despite reporting a jump in annual profits and announcing a $750m share buyback as travel continued to rebound from the Covid pandemic.

HSBC lost ground as it unveiled a special dividend and said quarterly profits almost doubled, driven by the rise in global interest rates, but struck a cautious note on the outlook.

Chilean miner Antofagasta was weaker after it posted a drop in full-year profits and revenue as operating costs rose and prices fell.

On the upside, Smith & Nephew was the top gainer on the FTSE 100 even as it reported a slump in operating profits.

In broker note action, Wizz Air was under the cosh after a double-downgrade to 'underweight' at Barclays, while Moneysupermarket was hit by a downgrade to 'add' at Numis.

Currys was in the black after an upgrade to 'reduce' at Numis and Bridgepoint was boosted by an initiation at 'buy' at Jefferies.

Market Movers

FTSE 100 (UKX) 7,998.26 -0.20% FTSE 250 (MCX) 20,047.46 -0.25% techMARK (TASX) 4,656.59 0.23%

FTSE 100 - Risers

Smith & Nephew (SN.) 1,209.50p 4.13% JD Sports Fashion (JD.) 182.55p 1.70% Burberry Group (BRBY) 2,580.00p 1.34% Frasers Group (FRAS) 801.00p 0.88% Smith (DS) (SMDS) 338.10p 0.63% Convatec Group (CTEC) 231.40p 0.61% Weir Group (WEIR) 1,880.00p 0.53% BAE Systems (BA.) 894.00p 0.52% Haleon (HLN) 335.35p 0.42% International Consolidated Airlines Group SA (CDI) (IAG) 163.64p 0.37%

FTSE 100 - Fallers

Anglo American (AAL) 3,252.50p -2.55% InterContinental Hotels Group (IHG) 5,494.00p -1.79% Hargreaves Lansdown (HL.) 858.00p -1.40% HSBC Holdings (HSBA) 613.20p -1.21% Ocado Group (OCDO) 621.60p -1.21% Antofagasta (ANTO) 1,740.00p -1.19% Prudential (PRU) 1,282.00p -1.16% Standard Chartered (STAN) 760.20p -1.09% RS Group (RS1) 994.00p -0.90% Glencore (GLEN) 515.40p -0.83%

FTSE 250 - Risers

Currys (CURY) 77.50p 3.47% Jupiter Fund Management (JUP) 146.70p 2.16% W.A.G Payment Solutions (WPS) 79.90p 1.78% Helios Towers (HTWS) 108.00p 1.50% Indivior (INDV) 1,600.00p 1.14% Network International Holdings (NETW) 286.20p 0.99% SDCL Energy Efficiency Income Trust (SEIT) 94.40p 0.96% HGCapital Trust (HGT) 373.50p 0.95% Petershill Partners (PHLL) 165.00p 0.86% Domino's Pizza Group (DOM) 314.00p 0.83%

FTSE 250 - Fallers

Wizz Air Holdings (WIZZ) 2,584.00p -3.47% Close Brothers Group (CBG) 967.00p -3.40% Moneysupermarket.com Group (MONY) 228.00p -2.56% Workspace Group (WKP) 499.60p -2.33% Bakkavor Group (BAKK) 106.00p -2.03% IntegraFin Holding (IHP) 291.00p -1.95% Future (FUTR) 1,452.00p -1.69% Fidelity China Special Situations (FCSS) 268.50p -1.65% Genus (GNS) 2,676.00p -1.47% Smithson Investment Trust (SSON) 1,413.00p -1.40%