(Sharecast News) - London stocks ended in the red on Tuesday, unable to hold on to earlier small gains following uninspiring borrowing figures, and as Brent crude crept back above $100 a barrel.
The FTSE 100 closed down 0.3% at 10,708.33, while Brent crude was up 0.1% at $100.23 a barrel, having fallen below the $100 mark earlier in the session following a report that Iran has offered to reopen the Strait of Hormuz within seven days if the US takes initial steps toward easing military pressure.
According to Kyodo News, citing a senior Iranian government official, the proposal - which has already been conveyed to Washington through mediators - calls for renewed talks aimed at reaching a permanent end to hostilities between the two countries.
It was understood that Tehran plans to use the UN General Assembly gathering this week in New York to consult with countries acting as intermediaries. The official ruled out a meeting between Iranian President Masoud Pezeshkian and Donald Trump on the fringes of the gathering, but said progress towards an agreement remains possible.
"There is a possibility of moving toward an agreement," the official said, adding that Washington must demonstrate "seriousness and commitment" if diplomacy is to advance.
On home shores, data from the Office for National Statistics showed the government borrowed more than expected last month, as spending outstripped a rise in tax receipts.
Public sector net borrowing was £18.3bn in August, up £2.9bn on the same month last year and higher than the £15.7bn markets had pencilled in. It also exceeded the Office for Budget Responsibility's forecast by £3.5bn.
Self-assessed income tax receipts in July and August rose by £1.9bn to £18.6bn. That was slightly above the OBR's forecast. However, spending was also above target, in part due to rising inflation. Debt interest payments totalled £8.8bn, the highest August figure since monthly records began in 1997.
Tom Davies, senior statistician at the ONS, said: "On the month, borrowing was up by almost a fifth on last August, as spending increased by more than government income, partly reflecting the impacts of inflation."
In the financial year to date, borrowing was notably lower than the same period last year, down 2.7% at £77.3bn. However, the OBR had expected a bigger fall.
Kathleen Brooks, research director at XTB, said: "There will be a lot of speculation from this data about next month's Budget. Some will argue that it supports tax rises. However, tax take is increasing rapidly in the UK, which suggests that the UK's borrowing is down to a spending problem, and if Healey raises taxes in next month's budget instead of cutting spending, then the public finances will remain weak, and the debt interest bill will continue to rise."
In equity markets, DIY retailer Kingfisher surged as it lifted annual guidance after a jump in half-year profits driven by a strong performance at its Screwfix unit which reported a 5.6% jump in like-for-like sales. The owner of B&Q, Brico Depot and Castorama said it now expects adjusted pre-tax profit of £595m to £635m, up from previous guidance of £565m to £625m, and free cash flow of £480m to £520m, versus £450m to £510m previously.
Home improvement retailer Wickes also rose sharply.
Smiths Group rallied as the engineer posted above-forecast earnings and guided for stronger growth going forward, despite the ongoing impact of war in the Middle East.
JD Sports advanced ahead of half-year results on Wednesday, while Oxford Biomedica ticked higher after well-received interim results.
In broker note action, Diploma was upgraded to 'overweight' by JPMorgan, while Burberry was downgraded to 'sector perform' from 'outperform' at RBC Capital Markets.
Market Movers
FTSE 100 (UKX) 10,708.33 -0.29%
FTSE 250 (MCX) 24,526.45 0.14%
techMARK (TASX) 6,173.08 -0.33%
FTSE 100 - Risers
Kingfisher (KGF) 343.70p 12.43%
Smiths Group (SMIN) 2,783.00p 7.45%
JD Sports Fashion (JD.) 78.72p 6.41%
Coca-Cola HBC AG (CDI) (CCH) 4,408.00p 3.43%
Ithaca Energy (ITH) 284.60p 2.64%
Croda International (CRDA) 3,292.00p 2.36%
Bunzl (BNZL) 2,674.00p 2.30%
Diploma (DPLM) 7,625.00p 1.87%
Coca-Cola Europacific Partners (DI) (CCEP) 7,680.00p 1.86%
Antofagasta (ANTO) 3,843.00p 1.86%
FTSE 100 - Fallers
BT Group (BT.A) 191.45p -3.84%
Admiral Group (ADM) 3,706.00p -3.39%
BAE Systems (BA.) 1,993.00p -2.50%
London Stock Exchange Group (LSEG) 8,154.00p -2.35%
Autotrader Group (AUTO) 484.10p -2.32%
Standard Chartered (STAN) 2,266.00p -2.29%
Airtel Africa (AAF) 312.00p -2.19%
Vodafone Group (VOD) 125.15p -2.15%
Aviva (AV.) 706.00p -2.05%
Babcock International Group (BAB) 977.00p -2.05%
FTSE 250 - Risers
Oxford Biomedica (OXB) 493.00p 6.02%
Wickes Group (WIX) 207.00p 5.94%
Wizz Air Holdings (WIZZ) 1,052.00p 3.75%
Vistry Group (VTY) 269.80p 3.61%
Pennon Group (PNN) 466.80p 3.46%
Oxford Nanopore Technologies (ONT) 178.00p 3.37%
Raspberry PI Holdings (RPI) 610.50p 2.95%
Auction Technology Group (ATG) 448.60p 2.75%
Travis Perkins (TPK) 611.50p 2.60%
Diversified Energy Company (DI) (DEC) 1,042.00p 2.36%
FTSE 250 - Fallers
Trainline (TRN) 196.70p -6.33%
TP Icap Group (TCAP) 329.80p -4.46%
Rightmove (RMV) 484.60p -4.12%
QinetiQ Group (QQ.) 489.00p -2.98%
Hays (HAS) 63.00p -2.93%
Mony Group (MONY) 192.40p -2.73%
Rosebank Industries NPV (ROSE) 331.00p -2.57%
Close Brothers Group (CBG) 395.60p -2.42%
Kier Group (KIE) 307.80p -2.41%
AEP Plantations (AEP) 203.00p -2.40%
30.68 (0.29%)
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