London open: FTSE gains as attention shifts to rate decisions

(Sharecast News) - London stocks rose in early trade on Tuesday as investors mulled the latest UK borrowing figures and turned their attention to upcoming rate decisions from the Federal Reserve, Bank of England and Swiss National Bank. At 0830 GMT, the FTSE 100 was up 0.8% at 7,461.09.

Lukman Otunuga, senior research analyst at FXTM, said that although the latest developments - the acquisition of Credit Suisse by UBS - have lifted sentiment, "the overall mood remains fragile with investors likely to remain guarded ahead of the Fed meeting tomorrow".

"We expect financial markets to remain volatile and highly sensitive to any fresh news concerning the global banking sector," he said.

"With fears over the crisis easing, we could see a modest return in risk appetite, lending support to global stocks. Shifting our focus elsewhere, this will be a big week for markets with the US Federal Reserve (Fed), Bank of England (BoE), and Swiss National Bank (SNB) policy meetings in focus. It will be interesting to see what the SNB has to say about the Credit Suisse developments, especially after the historic takeover."

On home shores, figures released earlier by the Office for National Statistics showed that government borrowing hit a record high for February due to the energy support scheme.

Public sector net borrowing came in at £16.7bn, up from £7.1bn in February 2022 and above consensus expectations of £11.4bn. It marked the highest level for the month of February since records began in 1993.

However, the data also showed that debt interest payments fell by £1.3bn on the year to £6.9bn.

Ruth Gregory, deputy chief UK economist at Capital Economics, said: "The news on the public finances may have raised the Chancellor's hopes that he will be able to announce a pre-election giveaway later this year.

"But the big risk is that a further escalation in the banking crisis causes a deterioration in the fiscal outlook as the hit to the public finances from weaker economic growth is only partially cushioned by lower gilt yields."

In equity markets, banks were in the black, recovering some poise after recent turmoil in the sector sent shares tumbling. Barclays, NatWest and Lloyds were all higher.

B&Q and Screwfix owner Kingfisher also gained as it posted a drop in full-year profit - in line with its guidance - as sales dipped, with trade normalising after the pandemic boost. In the year to the end of January 2023, adjusted pre-tax profit fell 20.2% to £758m, with sales down 0.9% to £13.1bn. The company had guided to pre-tax profit of £730m to £760m.

Educational publisher Pearson ticked a touch higher after saying it was selling its Online Learning Services (POLS) operation to private equity firm Regent for a deferred sum as part of a strategic review of its business.

In broker note action, TI Fluid Systems was lifted to 'hold' at Jefferies, while InterContinental Hotels was cut to 'sell' at Redburn.

Market Movers

FTSE 100 (UKX) 7,461.09 0.77% FTSE 250 (MCX) 18,628.25 0.72% techMARK (TASX) 4,484.47 0.50%

FTSE 100 - Risers

Kingfisher (KGF) 280.30p 2.56% JD Sports Fashion (JD.) 168.45p 2.49% Barclays (BARC) 139.74p 2.48% NATWEST GROUP (NWG) 263.90p 2.37% Ashtead Group (AHT) 4,978.00p 2.30% Lloyds Banking Group (LLOY) 47.10p 2.15% Rolls-Royce Holdings (RR.) 143.98p 2.13% Legal & General Group (LGEN) 235.30p 2.08% M&G (MNG) 183.95p 2.08% Prudential (PRU) 1,033.50p 2.07%

FTSE 100 - Fallers

Endeavour Mining (EDV) 1,799.00p -1.75% Airtel Africa (AAF) 109.20p -0.64% Vodafone Group (VOD) 91.92p -0.59% Fresnillo (FRES) 740.80p -0.43% Severn Trent (SVT) 2,840.00p -0.32% Coca-Cola HBC AG (CDI) (CCH) 2,141.00p -0.23% Ocado Group (OCDO) 416.60p -0.19% Haleon (HLN) 315.70p -0.17% United Utilities Group (UU.) 1,055.00p -0.14% SEGRO (SGRO) 752.80p -0.05%

FTSE 250 - Risers

Elementis (ELM) 114.60p 4.28% Ithaca Energy (ITH) 151.80p 3.48% TI Fluid Systems (TIFS) 95.60p 3.13% Darktrace (DARK) 280.00p 2.98% Currys (CURY) 61.70p 2.92% Just Group (JUST) 82.70p 2.86% Intermediate Capital Group (ICP) 1,199.50p 2.83% OSB Group (OSB) 505.50p 2.74% Bridgepoint Group (Reg S) (BPT) 200.40p 2.66% BH Macro Ltd. GBP Shares (BHMG) 440.00p 2.56%

FTSE 250 - Fallers

Pacific Horizon Inv Trust (PHI) 570.00p -2.06% Pagegroup (PAGE) 429.80p -1.74% Vanquis Banking Group 20 (VANQ) 214.00p -1.65% Hunting (HTG) 222.50p -1.55% Coats Group (COA) 73.80p -1.47% Watches of Switzerland Group (WOSG) 745.00p -1.26% C&C Group (CDI) (CCR) 144.00p -1.17% Savills (SVS) 932.00p -1.06% Senior (SNR) 149.40p -0.93% Personal Assets Trust (PNL) 472.00p -0.84%