Blue chip stock prices in London, Paris and Frankfurt were in the green at Wednesday midday, while British pub operator JD Wetherspoon was down a notch as it warned on higher costs amid an incoming increase in national insurance contributions for UK employers.
The UK Chancellor is unlikely to be celebrating after public sector net borrowing rose to £17.81 billion in December, far outpacing FXStreet-cited market consensus of £13.4 billion.
‘If anyone needed a reminder of the huge challenge being faced by Rachel Reeves, this morning’s...figures spell it out in underlined, bold and capital letters,’ said AJ Bell’s Danni Hewson. ‘Despite a chunky rise in the tax take of £4 billion the cash coming in just isn’t covering what’s going out, especially when those increases are offset by a fall in National Insurance contributions.
‘Add in a significant uptick in debt interest and you’ve got a recipe for continued jitters from financial markets, even if borrowing costs have dropped back from recent highs.’
The FTSE 100 index was up 29.18 points, 0.3%, at 8,577.47. The FTSE 250 was up 83.40 points, 0.4%, at 20,679.13, and the AIM All-Share was up 3.15 points, 0.4%, at 722.26.
The Cboe UK 100 was up 0.3% at 859.64, the Cboe UK 250 was up 0.4% at 18,067.19, and the Cboe Small Companies was down 0.3% at 15,733.30.
On the FTSE 100, Rio Tinto was down 0.2%, despite a Financial Times report that the miner expects the Trump administration to approve a huge copper mine in Arizona that has been held up for 12 years.
The project is 55% owned by Rio Tinto and 45% by BHP Group, and if developed would be the biggest copper mine in North America. London small-cap BHP was down 0.7%.
On the FTSE 250, JD Wetherspoon lost 1.7%.
The pub operator said food and drink sales rose in the first half of its financial year, but warned about the impact of rising costs imposed on the business.
AJ Bell’s Russ Mould said it experienced ‘a more subdued festive period than some of its peers’, adding: ‘It would not be a surprise to see a disproportionate impact [from the UK government Budget] relative to other hospitality firms given the company’s pitch is all about its value credentials.
‘This means the company has to balance the temptation to pass on higher costs with the need to ensure its prices remain attractive to punters.’
Also, Blackrock Smaller Cos Trust and Blackrock World Mining Trust were down 0.2% and 0.8% respectively.
The Blackrock-managed firms have signed deals with Saba Capital Management LP, amid spats between Saba and several London-listed investment trusts.
Neither deal involves a monetary consideration to Saba or its affiliates, and Saba must not seek control or influence over the trusts’ boards, funds or policies.
Additionally, Saba will not put forward any proposals or requisition resolutions and its vote on any matter should align with the recommendation of the trusts’ boards.
Among small caps, Petra Diamonds surged 13%.
The diamond miner has agreed to sell its interest in Williamson Diamonds, which ‘continues to encounter short-term liquidity challenges’, to Pink Diamonds Investments for up to $16 million.
Revel Collective plummeted 28%.
The bar and gastro pub operator reported increased LFL sales for the festive period, but said results were stymied by delays to Revolution Bars’ restructuring.
Additionally, Chief Executive Rob Pitcher warned that the Budget’s reduction in national insurance thresholds ‘will have a very damaging impact on the group.
‘These measures are regressive and offer no clear pathway for economic growth within the hospitality sector,’ he commented. ‘They also pose risks to the employment market.
‘We strongly urge the government to reconsider this policy in particular and explore more balanced alternatives.’
In European equities on Wednesday, the CAC 40 in Paris was up 0.9%, while the DAX 40 in Frankfurt was up 1.2%.
The pound was quoted at $1.2358 at midday on Wednesday in London, higher compared to $1.2319 at the equities close on Tuesday. The euro stood higher at $1.0445, against $1.0417. Against the yen, the dollar was trading higher at JP¥155.84 compared to JP¥155.43.
Stocks in New York were called higher. The Dow Jones Industrial Average was called up 0.2%, the S&P 500 index up 0.5%, and the Nasdaq Composite up 0.9%.
Brent oil was quoted flat at $79.62 a barrel at midday in London on Wednesday from $79.51 late Tuesday.
Gold was quoted higher at $2,757.50 an ounce against $2,740.35 on Tuesday.
Still to come on Wednesday’s economic calendar, the US Redbook index and Canadian producer price inflation are both out this afternoon.
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