(Sharecast News) - London stocks nudged a touch higher on Tuesday as investors weighed up a solid session on Wall Street, led by AI-linked shares, against UK uninspiring borrowing figures.
At 0825 BST, the FTSE 100 was 0.1% firmer at 10,753.57, while Brent crude was up 1.8% at $102.17 a barrel and West Texas Intermediate was 1.7% higher at $97.42.
Susannah Streeter, chief investment strategist at Wealth Club, said: "With the headlines predicting AI Armageddon dwindling, inflationary worries retreating a little and enthusiasm for AI agents gathering pace, it's laid the ground for a fresh streak higher for big tech names. The Nasdaq has broken through record levels once again, as appetite for the hyperscalers and chip giants resurged. The trigger appears to have been the huge popularity of Meta's Muse AI, the agentic tool which is highlighting voracious demand for the next wave of AI.
"Muse has hit number 1 for downloads on Apple's App Store after being released this month. While the advent of AI agents which can carry out complex tasks has been the talk of the town for years, Meta's launch of a personal AI agent in an easy-to-use app form has set pulses racing about widespread adoption. Meta's agent interacts with a user's digital experience, linking diaries and mail and can shop and make bookings. With expectations that the social network will integrate even further into the lives of billions around the world, and demand huge amounts of supporting infrastructure to do so, Meta's shares have rocketed.
"But the semiconductor sector was also buoyed, given that manufacturers like Intel and designers like Arm are the vital cogs in the engine room of this compute-heavy revolution. As the agentic era gains a firmer foothold, fears of a deceleration in AI adoption appear to have been put to bed for now, and instead the underlying hardware supply chain is enjoying a dramatic surge in expectations. Investors are aggressively buying into the belief that the massive spending cycle required for advanced chips won't just taper off, despite doom-laden headlines, but instead it'll stretch out well into the future."
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.
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.
Engineer Smiths Group rallied after well-received full-year results, while Rentokil gained as it agreed to sell SOLitude Lake Management and its Vertex Aquatic Solutions divisions to Bain Capital for $230m.
In broker note action, Diploma rose after an upgrade to 'overweight' by JPMorgan, while Burberry nudged lower after a downgrade to 'sector perform' from 'outperform' at RBC Capital Markets.
Market Movers
FTSE 100 (UKX) 10,753.57 0.14%
FTSE 250 (MCX) 24,514.84 0.10%
techMARK (TASX) 6,204.33 0.17%
FTSE 100 - Risers
Kingfisher (KGF) 332.00p 10.21%
Smiths Group (SMIN) 2,712.00p 4.36%
Airtel Africa (AAF) 322.20p 2.70%
Rentokil Initial (RTO) 321.30p 2.02%
Whitbread (WTB) 2,354.00p 1.94%
Bunzl (BNZL) 2,648.00p 1.45%
Ithaca Energy (ITH) 288.40p 1.44%
Centrica (CNA) 151.50p 1.44%
Coca-Cola HBC AG (CDI) (CCH) 4,314.00p 1.27%
AstraZeneca (AZN) 12,636.00p 1.25%
FTSE 100 - Fallers
Burberry Group (BRBY) 1,013.50p -1.12%
Admiral Group (ADM) 3,770.00p -1.09%
Standard Chartered (STAN) 2,271.00p -1.03%
Fresnillo (FRES) 2,941.00p -0.94%
Investec (INVP) 643.50p -0.77%
Aviva (AV.) 712.40p -0.75%
Land Securities Group (LAND) 628.50p -0.71%
British Land Company (BLND) 402.40p -0.69%
Lloyds Banking Group (LLOY) 109.10p -0.64%
Computacenter (CCC) 5,470.00p -0.54%
FTSE 250 - Risers
Harworth Group (HWG) 180.00p 3.93%
Pennon Group (PNN) 461.20p 2.39%
Hammerson (HMSO) 345.80p 2.31%
Berkeley Group Holdings (The) (BKG) 3,330.00p 2.22%
Travis Perkins (TPK) 605.00p 2.18%
Energean (ENOG) 768.00p 1.99%
Vistry Group (VTY) 263.60p 1.92%
Raspberry PI Holdings (RPI) 607.25p 1.77%
Diversified Energy Company (DI) (DEC) 1,036.00p 1.77%
Cranswick (CWK) 5,170.00p 1.76%
FTSE 250 - Fallers
Avon Technologies (AVON) 1,704.00p -5.02%
JPMorgan Emerging Markets Dividend Income (JEMI) 206.00p -3.74%
Premier Foods (PFD) 187.00p -3.01%
SDCL Efficiency Income Trust (SEIT) 36.00p -2.17%
Barr (A.G.) (BAG) 594.00p -1.98%
Foresight Group Holdings Limited NPV (FSG) 436.50p -1.91%
Hilton Food Group (HFG) 690.00p -1.85%
Safestore Holdings (SAFE) 526.00p -1.68%
Shawbrook Group (SHAW) 309.50p -1.58%
Pan African Resources (PAF) 124.20p -1.57%
19.34 (0.18%)
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