(Sharecast News) - London stocks were still a touch firmer by midday on Tuesday as investors shrugged off uninspiring borrowing figures, and as Brent crude fell below $100 a barrel on 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.
The FTSE 100 was up 0.1% at 10,753.53, while Brent crude was down 2.7% at $97.66 a barrel and West Texas Intermediate was 2.6% lower at $93.28.
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.
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 Rentokil nudged up it agreed to sell SOLitude Lake Management and its Vertex Aquatic Solutions divisions to Bain Capital for $230m.
On the downside, BP and Shell fell in tandem with oil prices.
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) 10,753.53 0.14%
FTSE 250 (MCX) 24,618.60 0.52%
techMARK (TASX) 6,172.30 -0.34%
FTSE 100 - Risers
Kingfisher (KGF) 336.30p 9.98%
Smiths Group (SMIN) 2,759.00p 6.49%
JD Sports Fashion (JD.) 76.66p 3.73%
Coca-Cola HBC AG (CDI) (CCH) 4,406.00p 3.47%
Antofagasta (ANTO) 3,888.00p 3.02%
Anglo American (AAL) 4,179.00p 2.91%
St James's Place (STJ) 1,152.00p 2.81%
Informa (INF) 918.40p 2.78%
International Consolidated Airlines Group SA (CDI) (IAG) 442.90p 2.43%
Metlen Energy & Metals (MTLN) 48.46p 1.93%
FTSE 100 - Fallers
BP (BP.) 529.50p -2.28%
Airtel Africa (AAF) 311.60p -2.01%
Admiral Group (ADM) 3,766.00p -1.77%
BT Group (BT.A) 195.20p -1.73%
Hiscox Limited (DI) (HSX) 1,915.00p -1.44%
BAE Systems (BA.) 2,017.00p -1.37%
Aviva (AV.) 711.60p -1.28%
Ithaca Energy (ITH) 280.00p -1.13%
GSK (GSK) 1,891.00p -1.05%
British Land Company (BLND) 401.80p -0.99%
FTSE 250 - Risers
Trustpilot Group (TRST) 222.40p 4.61%
Raspberry PI Holdings (RPI) 622.00p 4.60%
Wizz Air Holdings (WIZZ) 1,057.00p 4.04%
WPP (WPP) 392.60p 3.54%
IP Group (IPO) 74.70p 3.17%
Oxford Nanopore Technologies (ONT) 177.60p 3.14%
Wickes Group (WIX) 202.00p 3.12%
Mony Group (MONY) 203.20p 2.73%
SSP Group (SSPG) 190.10p 2.48%
Howden Joinery Group (HWDN) 776.50p 2.24%
FTSE 250 - Fallers
Harbour Energy (HBR) 262.00p -3.24%
Oxford Biomedica (OXB) 457.50p -2.69%
TP Icap Group (TCAP) 335.80p -2.61%
SDCL Efficiency Income Trust (SEIT) 36.05p -2.04%
Kier Group (KIE) 309.60p -1.97%
Energean (ENOG) 751.00p -1.96%
Lancashire Holdings Limited (LRE) 648.00p -1.52%
Ceres Power Holdings (CWR) 418.80p -1.32%
Partners Group Private Equity Limited. (EUR) (PEY) 6.96p -0.85%
Hays (HAS) 64.35p -0.85%
30.68 (0.29%)
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