London midday: Stocks tread water after borrowing, retail sales figures
London stocks were still treading water by midday on Tuesday as investors digested the latest UK borrowing figures and retail sales data.
The FTSE 100 was flat at 7,051.56, while sterling was 0.1% higher against the dollar at 1.4165.
Data released earlier by the Office for National Statistics showed that government borrowing fell in April but remained at its second highest level on record for the month.
Public sector borrowing was £31.7bn, down £15.6bn from the same month last year and marking the first annual fall since the start of the pandemic. The amount was comfortably below the Office for Budget Responsibility’s forecast of £39bn and consensus expectations of £32.4bn.
Still, borrowing remains at its second highest April level since records began in 1993 amid continued spending on the pandemic.
Meanwhile, the ONS estimate of borrowing in 2020/21 was revised down to £300.3bn from £303.1bn .This is well below the £354.6bn forecast by the OBR in March’s Budget but still the highest borrowing since financial year records began in March 1946.
Elsewhere, the latest survey from the Confederation of British Industry showed retail sales returned to more normal levels in May following a big jump in April after non-essential retailers were allowed to reopen.
Retailers reported that sales volumes were "broadly average" for the time of year, with a balance of -3 in May from +16 in April. The reported sales balance declined to +18 in May from +20 the month before, coming in below consensus expectations of +25.
CBI economist Ben Jones said the fact sales were in line with seasonal norms is a definite improvement from earlier in the year, but that this month’s survey is perhaps "a touch disappointing" after April’s stronger results.
Russ Mould, investment director at AJ Bell, said: "The FTSE 100 was struggling for direction like a drunkard in a blindfold on Tuesday morning, not unfairly given the continuing uncertainties over vaccines versus variants, the risks of inflation and the continuing volatility in the commodity and cryptocurrency markets.
"A relatively resilient jobs market has helped Government borrowing come in a little lower than expected for April. The question longer term is if this means tax increases and spending cuts can be eased slightly from the current projections."
In equity markets, Aveva was the standout gainer on the FTSE 100 after the industrial software company said trading had normalised in most of its markets from the impact of Covid-19, and that the outlook remained in line with expectations.
Royal Mail gained after an upgrade to ‘buy’ at Peel Hunt and amid expectations it will return to the FTSE 100 in the next reshuffle.
On the downside, convenience food group Greencore lost ground after saying it swung to a loss in the first half as Covid-related restrictions and lockdown dented revenues.
Avon Rubber was also down despite posting a jump in interim profit and revenue.
Provident Financial was weaker as guarantor lender Amigo Holdings tanked after the High Court rejected its rescue plan.
Trainline was knocked lower by a downgrade to ‘hold’ at Stifel.
Market Movers
FTSE 100 (UKX) 7,051.56 0.00%
FTSE 250 (MCX) 22,520.31 0.16%
techMARK (TASX) 4,334.21 0.09%
FTSE 100 - Risers
Aveva Group (AVV) 3,390.00p 3.51%
Just Eat Takeaway.Com N.V. (CDI) (JET) 6,402.00p 3.41%
Ocado Group (OCDO) 2,013.00p 2.57%
Renishaw (RSW) 5,505.00p 2.42%
International Consolidated Airlines Group SA (CDI) (IAG) 200.90p 1.97%
Rightmove (RMV) 602.20p 1.72%
Avast (AVST) 465.90p 1.53%
Compass Group (CPG) 1,604.50p 1.39%
Entain (ENT) 1,636.50p 1.36%
JD Sports Fashion (JD.) 925.80p 1.36%
FTSE 100 - Fallers
BT Group (BT.A) 174.95p -1.71%
M&G (MNG) 235.50p -1.26%
Reckitt Benckiser Group (RKT) 6,409.00p -1.19%
Glencore (GLEN) 308.65p -0.98%
Vodafone Group (VOD) 128.20p -0.91%
Royal Dutch Shell 'B' (RDSB) 1,339.80p -0.78%
Land Securities Group (LAND) 708.20p -0.73%
Aviva (AV.) 402.90p -0.69%
Anglo American (AAL) 3,136.00p -0.68%
Smiths Group (SMIN) 1,549.50p -0.64%
FTSE 250 - Risers
Cineworld Group (CINE) 95.90p 7.03%
Royal Mail (RMG) 581.60p 5.75%
Just Eat Takeaway.Com N.V. (CDI) (JET) 6,402.00p 3.41%
AO World (AO.) 267.40p 3.00%
Premier Foods (PFD) 110.80p 2.97%
Aston Martin Lagonda Global Holdings (AML) 1,974.50p 2.73%
Wizz Air Holdings (WIZZ) 4,705.00p 2.68%
Carnival (CCL) 1,687.00p 2.63%
Rank Group (RNK) 201.00p 2.45%
Bytes Technology Group (BYIT) 522.50p 2.35%
FTSE 250 - Fallers
Greencore Group (CDI) (GNC) 142.50p -16.57%
Avon Rubber (AVON) 3,052.00p -6.61%
Provident Financial (PFG) 245.20p -5.33%
Trainline (TRN) 285.20p -3.97%
Dr. Martens (DOCS) 485.40p -2.92%
Hammerson (HMSO) 35.83p -2.66%
Shaftesbury (SHB) 583.00p -2.59%
UK Commercial Property Reit Limited (UKCM) 73.20p -2.14%
C&C Group (CDI) (CCR) 302.80p -2.01%
Derwent London (DLN) 3,394.00p -1.96%