London pre-open: Stocks to fall after US losses; borrowing data in focus

(Sharecast News) - London stocks were set to fall at the open on Thursday following heavy losses on Wall Street, as investors digest the latest UK borrowing figures. The FTSE 100 was called to open around 40 points lower at 7,676.

Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said: "We start feeling the cracks in market optimism: the bonds extended their rally yesterday after the inflation data in Britain surprised to the downside, but major US indices saw a sharp retreat.

"A 12% plunge in FedEx - which acts like a gauge of economic activity, the overbought market conditions in major global stock indices and the awareness that a further fall in bond yields weaken the idea of soft landing triggered a much-needed retreat in equity valuations."

On home shores, data released earlier by the Office for National Statistics showed that the government borrowed more than expected in November.

Public sector net borrowing excluding public sector banks came in at £14.3bn. This was below November 2022's £15.2bn but above consensus forecasts of £13bn. It also marked the fourth highest November borrowing since monthly records began in 1993.

Debt interest payments for November surpassed all monthly November figures on record since 1997, coming in at £7.7bn.

For the eight months to November, public sector net borrowing excluding banks was £116.4bn - the second highest financial year-to-November borrowing on record.

In corporate news, troubled music rights owner Hipgnosis Songs Fund reported wider interim losses and said dividends would be suspended for at least the end of the financial year to comply with loan covenants amid a row with its investment adviser over the valuation of assets.

Operating losses before tax for the six months to September 30 were $63.6m, compared with a loss of $17m a year earlier. Gross revenue from continuing operations for the period fell to $63.2m from $86.4m.

The company is undergoing a strategic review to deal with "ongoing failures in the financial reporting and control process".

HICL Infrastructure announced the acquisition of an additional 3.1% stake in the A63 Motorway concession in France for £20m, bringing its total interest in the project to 24%.

The A63 is a 40-year toll-road concession, and the acquisition was expected to be completed early next year, pending consents.

HICL said the investment offered an opportunity with significantly higher returns compared to alternative uses of capital.