London midday: Stocks edge up as miners rally

(Sharecast News) - London stocks had ticked a little further into the black by midday on Wednesday, helped along by a solid performance from the mining sector, as investors mulled borrowing figures and looked ahead to the release of the latest Federal Reserve minutes. The FTSE 100 was up 0.2% at 8,287.37.

Figures released earlier by the Office for National Statistics showed that government borrowing was higher than expected in July.

Borrowing came in at £3.1bn, up £1.8bn on July 2023 and £100m higher than the Office for Budget Responsibility was expecting. It was also above the £2.5bn expected by economists and marked the highest borrowing figure for July since 2021.

Cumulative borrowing in the first four months of the fiscal year was £51.4bn. This was £500m less than in the same period a year earlier, but £4.7bn more than the OBR had forecast in March.

Jessica Barnaby, deputy director for public sector finances at the ONS, said: "Revenue was up on last year, with income tax receipts in particular growing strongly.

"However, this was more than offset by a rise in central government spending where, despite a reduction in debt interest, the cost of public services and benefits continued to increase."

Alex Kerr, UK economist at Capital Economics, said: "Overall, today's release highlights the tight fiscal backdrop that the Chancellor faces ahead of her first Budget on 30th October. We still think that she will look to raise an additional £10bn a year via higher taxes in the Budget and increase borrowing by around £7bn a year."

Looking ahead to the rest of the day, the Fed minutes are due after the close of UK markets at 1900 BST.

Richard Hunter, head of markets at Interactive Investor, said: "Investors will be looking for reassurance that the Fed is still on track and has not fallen behind the curve in cutting rates too late to avoid the economy entering recessionary territory."

In equity markets, heavily-weighted miners were among the top gainers on the FTSE 100 as metals prices rose, with Anglo American, Rio Tinto, Antofagasta and Glencore all up.

Dan Coatsworth, investment analyst at AJ Bell, said: "Just days after iron ore prices hit their lowest level in two years, the metal staged a small recovery amid hopes that stimulus measures in China could help to avoid a major slump in demand for the metal.

"Iron ore is a key component in steelmaking and is used in property construction. China has suffered from a big slump in its real estate sector, with countless properties either sitting empty or half-built.

"Reports that local governments in the country might be allowed to buy unsold homes received a positive reaction from the markets, but it is hard to see how this will be enough to properly rejuvenate the sector."

Elsewhere, JD Sports gained ahead of a second-quarter trading update on Thursday.

Public bus operator Mobico surged as it held annual guidance after a jump in adjusted interim operating profit driven by positive demand and cost cuts.

Profit for the six months to 30 June rose 23.8% to £71.2m while on a pre-tax basis the company narrowed losses to £1.5m from £52m a year earlier. No dividend was declared as the group, formerly known as National Express, continues to deleverage.

It still expects adjusted operating profit for 2024 to be within the range of £185m to £205m.

BT Group was weaker again, having tumbled on Tuesday after competitor CityFibre announced a long-term broadband partnership with Sky.

Elsewhere, Barratt and Redrow were in focus again as their merger came one step closer to regulatory approval after the Competition and Markets Authority said that allowances made by the companies may just be enough to get the green light.

Market Movers

FTSE 100 (UKX) 8,287.37 0.17% FTSE 250 (MCX) 21,023.88 0.18% techMARK (TASX) 4,861.19 -0.10%

FTSE 100 - Risers

JD Sports Fashion (JD.) 126.25p 2.48% Anglo American (AAL) 2,296.50p 2.34% Rio Tinto (RIO) 4,872.50p 2.00% Entain (ENT) 646.40p 1.73% Airtel Africa (AAF) 112.20p 1.63% Halma (HLMA) 2,583.00p 1.33% Diageo (DGE) 2,474.00p 1.33% Rentokil Initial (RTO) 486.30p 1.25% Croda International (CRDA) 3,907.00p 1.17% Prudential (PRU) 659.80p 1.13%

FTSE 100 - Fallers

3i Group (III) 3,164.00p -1.65% BT Group (BT.A) 134.25p -1.50% Flutter Entertainment (DI) (FLTR) 15,800.00p -0.66% Taylor Wimpey (TW.) 164.50p -0.63% Severn Trent (SVT) 2,516.00p -0.63% Rolls-Royce Holdings (RR.) 490.60p -0.49% SEGRO (SGRO) 869.20p -0.48% NATWEST GROUP (NWG) 345.70p -0.46% Associated British Foods (ABF) 2,436.00p -0.45% Shell (SHEL) 2,721.50p -0.42%

FTSE 250 - Risers

International Workplace Group (IWG) 177.60p 2.78% Elementis (ELM) 161.80p 2.66% OSB Group (OSB) 393.00p 2.50% Watches of Switzerland Group (WOSG) 390.20p 2.15% Victrex plc (VCT) 1,010.00p 1.92% 4Imprint Group (FOUR) 5,370.00p 1.90% W.A.G Payment Solutions (WPS) 67.40p 1.81% Diversified Energy Company (DEC) 1,014.00p 1.81% Hochschild Mining (HOC) 187.60p 1.74% Close Brothers Group (CBG) 485.20p 1.68%

FTSE 250 - Fallers

Syncona Limited NPV (SYNC) 120.00p -2.28% Baillie Gifford US Growth Trust (USA) 196.00p -1.31% Jlen Environmental Assets Group Limited NPV (JLEN) 92.60p -1.28% Grafton Group Ut (CDI) (GFTU) 1,010.20p -1.21% Pacific Horizon Inv Trust (PHI) 597.00p -1.16% PPHE Hotel Group Ltd (PPH) 1,325.00p -1.12% Chemring Group (CHG) 399.50p -1.11% PureTech Health (PRTC) 165.00p -1.08% Trainline (TRN) 305.80p -0.97% Carnival (CCL) 1,065.50p -0.88%