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London open: Stocks edge lower after inflation, borrowing figures

By Michele Maatouk

Date: Wednesday 21 Oct 2020

London open: Stocks edge lower after inflation, borrowing figures

(Sharecast News) - London stocks edged lower in early trade on Wednesday as investors mulled the latest UK inflation and borrowing figures.
At 0830 BST, the FTSE 100 was down 0.2% at 5,880.18.

Figures released earlier by the Office for National Statistics showed the government borrowed £36.1bn in September, taking borrowing in the first six months of the financial year to a record £208.5bn.

Separate ONS data showed that annual consumer price inflation in September rose to 0.5% from 0.2% in August, when it had been cut by the government's "Eat out to Help Out" subsidised meal scheme to help the restaurant sector. The figure was in line with analysts' expectations.

Inflation accelerated as the scheme wound down and a surge in demand for second-hand cars pushed up prices.

The government borrowed £174.5bn more in the half year than in the same period last year - the highest in any April to September period since records began in 1993. Each of the six months from April to September 2020 were also records, the ONS said.

Capital Economics said: "With CPI inflation just 0.5% in September, it's hard to think of reasons why the Bank of England won't launch another £100bn or so of QE at the November meeting. And despite public borrowing still jumping, the government may yet spend more."

More broadly, market participants continued to consider the prospect of further US stimulus after US House Speaker Nancy Pelosi said she was hopeful for a stimulus agreement this week, which would be bigger, better and retroactive.

However, Senate Majority Leader Mitch McConnell warned the White House against a bigger Pelosi-led deal before 3 November.

Meanwhile, worries about the Covid-19 pandemic and related restrictions continued to play on investors' minds as Greater Manchester was plunged into a tier 3 lockdown.

In equity markets, cybersecurity provider Avast gained after it reaffirmed its full-year guidance and posted a rise in third-quarter earnings and revenue.

Chilean miner Antofagasta was also in the black after it reported a 4.6% decline in third-quarter copper production but backed its guidance for the full year.

British Airways and Iberia parent IAG flew higher after an upgrade to 'buy' from 'hold' at Goodbody, which said it expects a "comforting" update at the end of the month.

Precious metals miner Fresnillo lost its shine after trimming its full-year gold production guidance, while Centamin was weaker after it said gold production and sales fell in the third quarter.

Bookmaker William Hill was in focus after saying 10% of its UK betting shops were located in 'high level' Covid-19 alert areas as the government started to introduce tougher measures to combat a resurgence of the coronavirus. It added that core earnings would fall by £2m if 100 shops were shut for four weeks.

Market Movers

FTSE 100 (UKX) 5,880.18 -0.15%
FTSE 250 (MCX) 17,913.36 -0.09%
techMARK (TASX) 3,801.14 -0.37%

FTSE 100 - Risers

Evraz (EVR) 369.10p 2.13%
Standard Chartered (STAN) 388.10p 1.97%
Avast (AVST) 521.50p 1.66%
International Consolidated Airlines Group SA (CDI) (IAG) 108.50p 1.54%
Antofagasta (ANTO) 1,060.00p 1.29%
Glencore (GLEN) 170.34p 1.12%
Kingfisher (KGF) 322.90p 0.87%
NATWEST GROUP PLC ORD 100P (NWG) 116.45p 0.87%
Barclays (BARC) 104.98p 0.63%
RSA Insurance Group (RSA) 432.30p 0.56%

FTSE 100 - Fallers

Fresnillo (FRES) 1,289.00p -3.30%
Ocado Group (OCDO) 2,422.00p -1.46%
Smiths Group (SMIN) 1,393.00p -1.17%
BAE Systems (BA.) 473.80p -1.17%
Rentokil Initial (RTO) 526.60p -1.16%
Informa (INF) 432.40p -1.03%
Barratt Developments (BDEV) 525.60p -1.02%
Smith & Nephew (SN.) 1,471.00p -1.01%
Diageo (DGE) 2,606.00p -0.93%
DCC (DCC) 5,156.00p -0.92%

FTSE 250 - Risers

Cineworld Group (CINE) 29.20p 2.82%
Trainline (TRN) 297.80p 2.69%
Energean (ENOG) 551.90p 2.53%
Babcock International Group (BAB) 257.70p 1.98%
Cairn Energy (CNE) 146.00p 1.96%
Dixons Carphone (DC.) 106.40p 1.92%
John Laing Group (JLG) 304.00p 1.88%
Provident Financial (PFG) 209.00p 1.85%
IntegraFin Holding (IHP) 498.50p 1.84%
SSP Group (SSPG) 189.60p 1.83%

FTSE 250 - Fallers

Centamin (DI) (CEY) 137.50p -15.38%
Network International Holdings (NETW) 298.80p -3.92%
Synthomer (SYNT) 380.80p -2.21%
Oxford Biomedica (OXB) 786.00p -2.00%
Jupiter Fund Management (JUP) 227.60p -1.90%
Vesuvius (VSVS) 414.80p -1.85%
PZ Cussons (PZC) 244.00p -1.61%
Cranswick (CWK) 3,414.00p -1.56%
LondonMetric Property (LMP) 215.00p -1.56%
Oxford Instruments (OXIG) 1,626.00p -1.45%


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