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Important information: The value of investments can go down as well as up so you may get back less than you invest. Investors should note that the views expressed may no longer be current and may have already been acted upon. This is a third-party news feed and may not reflect Fidelity’s views.

London open: Stocks fall after US losses, UK borrowing figures

(Sharecast News) - London stocks fell in early trade on Thursday following heavy losses on Wall Street, as UK borrowing figures came in higher than expected. At 0830 GMT, the FTSE 100 was down 0.3% 7,696.24.

Derren Nathan, head of equity research at Hargreaves Lansdown, said UK markets are unlikely to take any comfort from news that November's budget deficit was above consensus.

"This may also limit messrs Sunak and Hunt's wiggle room to hand out further sweeteners ahead of elections expected next year. The FTSE 100 has opened back below 7,700 after posting a 1% gain yesterday," he said.

"This follows the biggest day of losses since October for US indices. With broad based falls across all sectors there was little shelter for traders. Both the Nasdaq Composite and S&P 500 were down 1.5%. The move was driven by relatively light trading volumes. With the US markets still at close to record highs, this optimism is showing signs of fragility."

Data released earlier by the Office for National Statistic showed that public sector net borrowing excluding public sector banks came in at £14.3bn. This was below November 2022's £15.2bn but above consensus forecasts of £13bn. It also marked the fourth highest November borrowing since monthly records began in 1993.

Debt interest payments for November surpassed all monthly November figures on record since 1997, coming in at £7.7bn.

For the eight months to November, public sector net borrowing excluding banks was £116.4bn - up by £24.4bn on the same period a year earlier and the second highest financial year-to-November borrowing on record.

Ashley Webb, UK economist at Capital Economics, said he doubts the higher-than-expected borrowing figures will prevent the Chancellor from embarking on a pre-election fiscal splash in the Spring Budget.

Webb said the recent drop in market interest rate expectations supports CE's view that interest rates will be lower in 2025 than the Office for Budget Responsibility predicted in November.

"As a result, we expect this to give the Chancellor more wiggle room to unveil a further pre-election splash at the Sprint Budget. But this would almost certainly be followed by hefty tax rises in 2025 after the election."

Corporate news was scarce as we head into the Christmas break, but troubled music rights owner Hipgnosis Songs Fund fell as it reported wider interim losses. It also said dividends would be suspended for at least the end of the financial year to comply with loan covenants amid a row with its investment adviser over the valuation of assets.

Operating losses before tax for the six months to September 30 were $63.6m, compared with a loss of $17m a year earlier. Gross revenue from continuing operations for the period fell to $63.2m from $86.4m.

Elsewhere, Vodafone edged up following a report that Swisscom is weighing a possible offer for its Italian business next year.

Market Movers

FTSE 100 (UKX) 7,696.24 -0.25% FTSE 250 (MCX) 19,504.07 -0.64% techMARK (TASX) 4,288.26 0.07%

FTSE 100 - Risers

Rio Tinto (RIO) 5,848.00p 1.12% Vodafone Group (VOD) 67.99p 0.76% BAE Systems (BA.) 1,093.00p 0.55% Relx plc (REL) 3,102.00p 0.52% Sage Group (SGE) 1,179.00p 0.43% London Stock Exchange Group (LSEG) 9,318.00p 0.39% Centrica (CNA) 142.70p 0.35% HSBC Holdings (HSBA) 621.50p 0.34% Anglo American (AAL) 1,918.20p 0.32% Reckitt Benckiser Group (RKT) 5,442.00p 0.22%

FTSE 100 - Fallers

Ocado Group (OCDO) 768.40p -2.61% British American Tobacco (BATS) 2,278.00p -2.48% Burberry Group (BRBY) 1,459.50p -2.15% United Utilities Group (UU.) 1,078.00p -2.04% Admiral Group (ADM) 2,672.00p -1.55% Endeavour Mining (EDV) 1,788.00p -1.43% Kingfisher (KGF) 244.20p -1.37% Legal & General Group (LGEN) 248.00p -1.27% Phoenix Group Holdings (PHNX) 523.20p -1.13% Entain (ENT) 1,007.00p -1.13%

FTSE 250 - Risers

Trustpilot Group (TRST) 149.90p 1.22% HarbourVest Global Private Equity Limited A Shs (HVPE) 2,380.00p 1.06% Grainger (GRI) 272.80p 1.04% Hays (HAS) 110.30p 0.82% Pagegroup (PAGE) 492.80p 0.78% Fidelity China Special Situations (FCSS) 207.50p 0.73% Breedon Group (BREE) 362.50p 0.69% Marshalls (MSLH) 279.20p 0.65% NCC Group (NCC) 131.00p 0.61% Computacenter (CCC) 2,812.00p 0.57%

FTSE 250 - Fallers

Volution Group (FAN) 401.40p -4.97% IntegraFin Holding (IHP) 287.00p -4.14% Darktrace (DARK) 360.70p -4.09% 4Imprint Group (FOUR) 4,470.00p -3.66% Bridgepoint Group (Reg S) (BPT) 280.00p -2.71% Britvic (BVIC) 850.00p -2.47% Ibstock (IBST) 145.20p -2.42% Ruffer Investment Company Ltd Red PTG Pref Shares (RICA) 267.50p -2.37% Workspace Group (WKP) 568.50p -2.32% RHI Magnesita N.V. (DI) (RHIM) 3,384.00p -2.20%

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Important information: This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice. When you are thinking about investing in shares, it’s generally a good idea to consider holding them alongside other investments in a diversified portfolio of assets. Past performance is not a reliable indicator of future returns.

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