(Sharecast News) - London stocks rose in early trade on Friday as investors mulled better-than-expected government borrowing and retail sales figures.
At 0830 GMT, the FTSE 100 was up 0.2% at 10,651.21.
Data released earlier by the Office for National Statistics showed the government recorded its highest surplus in January since records began in 1993.
The surplus came in at 30.4bn, above expectations of 24bn and double the figure from January 2025. It was also 6.3bn above the Office for Budget Responsibility's November 2025 forecast.
Borrowing in the financial year to January 2026 was 112.1bn, down 11.5% on the same period a year earlier, but still the fifth-highest April to January borrowing on record.
ONS chief economist Grant Fitzner said: "January - which is traditionally a strong month for self-assessed tax receipts - saw the highest surplus since monthly records began.
"Revenue was strongly up on the same time last year, while spending was little changed, due to lower debt interest payments largely offsetting higher costs on public services and benefits.
"Across the first ten months of the current financial year, borrowing is lower than the same period a year ago."
Separate data from the ONS showed that retail sales rose 1.8% on the month in January following a 0.4% increase in December and comfortably beating expectations for 0.2% growth. On a yearly basis, sales were up 4.5%, ahead of expectations for a 2.8% jump.
Grant Fitzner said: "Retail sales rose slightly in the latest three months, as sales continued to pick up in the new year following a weak November.
"Motor fuel sales increased a little across the period, while sales of art works, tech retailers and furniture stores also performed well. These were partially offset by falls in supermarket sales."
Despite the upbeat tone in markets, geopolitical tensions were in focus after US president Donald Trump gave Iran a deadline of 10 to 15 days to make a deal over its nuclear program or "bad things" would happen.
At the inaugural meeting of his Board of Peace in Washington, Trump said Iran needed to reach a "meaningful" agreement with the US amid a massive US military buildup in the Middle East. "It's proven to be over the years not easy to make a meaningful deal with Iran - we have to make a meaningful deal otherwise bad things happen," he said.
Richard Hunter, head of markets at Interactive Investor, said: "There is some debate as to whether the rhetoric from the White House is another example of the President's tendency to shoot from the hip, or whether some kind of military intervention is actually possible given that the US is beginning to amass forces in the region.
"In any event, given Iran's access to the transportation of oil, a further surge in crude resulted in the price having risen by 18.5% in the year to date, while gold rose once more given its defensive asset status."
In equity markets, luxury fashion brand Burberry shot to the top of the FTSE 100 as Italy's Moncler - famous for its puffer jackets - reported better-than-expected full-year results.
Anglo American edged higher as it reported a slight rise in annual earnings as higher copper prices offset a 10% decline in production of the metal due to lower grades and plant maintenance while continuing tough conditions at its De Beers diamond unit also weighed on earnings.
Underlying core earnings rose 2% to $6.4bn. The final dividend was slashed by 27% to 16cents a share, for a total of 23cents a share, down 64%. Anglo wrote down the value of its De Beers diamond business by $2.3bn, the third in three years.
St James's Place was boosted by an upgrade to 'buy' at UBS, while BlackRock Smaller Companies Trust rallied on news it's planning to merge with BlackRock Throgmorton Trust.
On the downside, Aston Martin Lagonda was a touch weaker as it said it was planning to sell the naming rights to its Formula 1 team for 50m to boost its liquidity, and warned its annual loss would be worse than expected, partly due to US tariffs.
Market Movers
FTSE 100 (UKX) 10,651.21 0.23%
FTSE 250 (MCX) 23,632.78 0.25%
techMARK (TASX) 6,129.99 0.15%
FTSE 100 - Risers
Burberry Group (BRBY) 1,215.00p 3.45%
Games Workshop Group (GAW) 17,400.00p 2.05%
Diageo (DGE) 1,817.50p 2.02%
St James's Place (STJ) 1,296.50p 2.01%
Antofagasta (ANTO) 3,943.00p 1.75%
London Stock Exchange Group (LSEG) 7,898.00p 1.54%
Centrica (CNA) 188.70p 1.51%
The Sage Group (SGE) 818.40p 1.46%
CRH (CDI) (CRH) 9,416.00p 1.16%
Legal & General Group (LGEN) 274.90p 0.92%
FTSE 100 - Fallers
Smurfit Westrock (DI) (SWR) 3,720.00p -1.77%
BP (BP.) 473.35p -1.18%
Sainsbury (J) (SBRY) 351.80p -0.79%
Tesco (TSCO) 493.00p -0.76%
BAE Systems (BA.) 2,150.00p -0.60%
DCC (CDI) (DCC) 5,170.00p -0.58%
Vodafone Group (VOD) 114.85p -0.52%
Rentokil Initial (RTO) 460.10p -0.50%
United Utilities Group (UU.) 1,329.50p -0.45%
Next (NXT) 12,935.00p -0.42%
FTSE 250 - Risers
BlackRock Smaller Companies Trust (BRSC) 1,434.00p 4.37%
Dr. Martens (DOCS) 69.50p 3.35%
Renishaw (RSW) 4,390.00p 2.45%
Bytes Technology Group (BYIT) 303.00p 2.43%
Rathbones Group (RAT) 2,215.00p 2.31%
Baltic Classifieds Group (BCG) 186.00p 2.20%
Trustpilot Group (TRST) 141.00p 2.17%
Partners Group Private Equity Limited. (EUR) (PEY) 9.64p 1.90%
JPMorgan India Growth & Income (JIGI) 976.00p 1.88%
THG (THG) 35.90p 1.82%
FTSE 250 - Fallers
Target Healthcare Reit Ltd (THRL) 102.00p -4.32%
Avon Technologies (AVON) 1,734.00p -3.45%
Chemring Group (CHG) 504.00p -3.45%
Johnson Service Group (JSG) 143.00p -2.32%
Pets at Home Group (PETS) 219.20p -1.79%
Pacific Horizon Inv Trust (PHI) 928.00p -1.59%
Diversified Energy Company (DI) (DEC) 1,026.00p -1.35%
TR Property Inv Trust (TRY) 345.00p -1.29%
RHI Magnesita N.V. (DI) (RHIM) 3,125.00p -1.26%
Ibstock (IBST) 130.00p -1.22%
63.89 (0.60%)
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