FTSE 100 Live May 23: Sovereign debt beats forecasts, Drahi buys more BT shares, FTSE lower

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Snapshot during market opening

Minutes into the London trading session, here is a snapshot of your key market data.

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Utility stocks lead FTSE 100 down, BT shares up 2%

London blue-chip stocks got off to a worse start than expected, with the FTSE 100 index falling 0.2% or 15.95 points to 7755.04.

The latest lackluster session included modest declines in Anglo American and HSBC shares, while utility stocks like National Grid, Severn Trent and United Utilities fell out of favour.

However, BT shares rose 2%, or 2.65p, to 150.5p after Patrick Drahi announced he had increased his stake in the telecoms giant by 24.5%.

The FTSE 250 index fell 18.52 points to 19,254.82, although supermarket meat supplier Cranswick was up 3% and train station caterer SSP was up 5% on their respective results.

Military helmet supplier Avon Protection fell 9% in the FTSE All-Share, falling 90p to 880p after interim results included cautious forecasts for its respiratory protection division for the remainder of the year.

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Helical affected by 10% write-down of portfolio

London property developer Helical’s portfolio value fell 10.1% to £839.5m, but CEO Gerald Kaye pointed out that it still meant the company was outperforming the central London market average.

The developer, which owns the JJ Mack Building in Farringdon, suffered a loss of £64.5m on the write-down of its portfolio.

“Basically, we haven’t had a bad year,” Kaye said. “We’ve made sales, we’ve got some good leases and we’re seeing rental growth for the prime assets.

“And what we’re most excited about is our development pipeline.”

Analysts at Peel Hunt said, “A strong pipeline of opportunities and an implied yield of 7.9% remains extremely attractive.”

Spiral
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More borrowing might not stop Hunt from cutting taxes

Ruth Gregory, deputy chief UK economist at Capital Economics, says she doesn’t think today’s high credit numbers mean the Chancellor needs to tighten fiscal policy.

She noted that borrowing was lower than expected last year and longer-term borrowing is still below OBR forecasts.

“The April public finance numbers made for a shaky start to the new fiscal year,” she said. “But we doubt this will deter the chancellor from embarking on fiscal austerity ahead of the next election, which is due to be held before January 2025.”

“We would not be at all surprised to see a pre-election gift in the autumn declaration on top of the £21.9 billion (0.8% of GDP) gift for 2023/24 that was announced in the budget back in March .”

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Drahi buys more BT shares

French billionaire Patrick Drahi’s stake in BT now stands at 24.5% after his telecom company Altice announced this morning it would buy a further 650 million shares.

At the same time, Altice has confirmed that it has no intention of making a takeover bid for the FTSE 100 listed company.

Drahi’s latest investment comes after BT’s full-year results last Thursday pushed the stock down to just 135p, although it had recovered to 146.6p at the close last night.

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The focus on the debt ceiling is holding markets back

Wall Street markets’ caution is likely to carry over to Europe this morning as the FTSE 100 Index is expected for a broadly flat start.

Subdued global performance comes as traders prefer to await developments in the US debt ceiling negotiations.

In Monday’s session, the Dow Jones Industrial Average fell 0.4% while the S&P 500 index was near its opening level. However, momentum for US technology stocks continued as the Nasdaq Composite added another 0.5%.

The FTSE 100 was up 0.2% yesterday and CMC Markets expects it to open four points higher at 7775 today. The main focus of the session is likely to be the upcoming PMI numbers from the UK and major economies across Europe.

Brent crude futures were at $76.13 a barrel today while the pound was trading at $1.242.

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Public borrowing is higher than expected at £25.6 billion

Public sector net borrowing was £25.6 billion in April, well above the expected £19.1 billion.

In addition to higher benefit payments and interest on debt, energy subsidies continued to be a key factor in the high level of borrowing.

After borrowing for the full year 2022-23 came in lower than expected, raising hopes for fall tax cuts, the higher-than-expected figure could make Jeremy Hunt more cautious.

The reading was the second highest reading for April since records began in 1993.

Public sector net debt is now £2,536.9 billion.

https://www.standard.co.uk/business/ftse-100-live-23-may-zoom-earnings-beat-estimates-public-sector-net-debt-pound-dollar-stocks-shares-palantir-bt-stake-b1082974.html FTSE 100 Live May 23: Sovereign debt beats forecasts, Drahi buys more BT shares, FTSE lower

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