Source: Sharecast
After settling above the 9,000 mark for the first time ever on Monday, the UK benchmark index was trading just 0.05% lower by lunchtime at 9,008.
A bigger-than-expected surge in UK public sector borrowing dampened risk appetite in morning trade, sending 10-year Gilt yields up 4.6 basis points to an intraday high of 4.652%.
Russ Mould, investment director at AJ Bell, said weaker bonds/rising yields is "the market’s way of saying it isn’t impressed with the state of public finances". He added: "Soaring debt interest payments haven’t helped and the situation will further stir speculation that the government will have to put up taxes in the Autumn Budget."
UK government borrowing jumped £6.6bn year on year to £20.7bn in June, well above forecasts of £16.5bn. It was the second-highest June borrowing figures since monthly records began in 1993, beaten only by June 2020 amid the height of the Covid-19 pandemic when government spending soared to prop up the economy.
Interest payable on government debt jumped to £16.4bn last month, a rise of £8.4bn on June 2024 and higher than the £14bn forecast by the Office for Budget Responsibility.
Compass gains, housebuilders fall
Food services business Compass Group jumped 5% after upgrading full-year profit guidance due to strong organic growth and a better-than-expected M&A performance. Compass Group also announced it has agreed to acquire Vermaat Groep, a leading premium food services business in Europe, for approximately €1.5bn.
British Gas-owner Centrica was also outperforming after taking a 15% stake in nuclear power station Sizewell C, one of a number of new private investors to inject funds into the £38bn project.
Barratt Redrow, Taylor Wimpey and Vistry were among the day's worst performers as rising bond yields hit the housebuilding sector.
"Housebuilders were knocked by the public sector finance figures as the rise in gilt yields suggests the market believes interest rates could stay higher for longer. Housebuilders are desperately waiting for rates to come down as that could make mortgages more affordable and help more people get on the property ladder," Mould from AJ Bell said.
Drugmaker AstraZeneca was flat as investors gave a lukewarm reaction to plans to invest $50bn in the US for medicines manufacturing and R&D by 2030. AstraZeneca said its investment will support its ambition to reach $80bn in revenues by 2030, with 50% generated in the US.
Kier Group fell on the news that chief executive Andrew Davies is retiring at the end of October, with Stuart Togwell, the building firm's group managing director of construction, named as replacement.
Market Movers
FTSE 100 (UKX) 9,008.41 -0.05%
FTSE 250 (MCX) 21,891.24 -0.55%
techMARK (TASX) 5,142.81 -0.47%
FTSE 100 - Risers
Compass Group (CPG) 2,658.00p 5.31%
Centrica (CNA) 162.75p 3.89%
Glencore (GLEN) 320.85p 2.59%
SSE (SSE) 1,971.00p 2.18%
Rentokil Initial (RTO) 363.10p 2.11%
Entain (ENT) 979.20p 2.11%
British American Tobacco (BATS) 3,896.00p 1.56%
Vodafone Group (VOD) 83.96p 1.06%
United Utilities Group (UU.) 1,151.50p 1.05%
Rio Tinto (RIO) 4,654.00p 0.95%
FTSE 100 - Fallers
Spirax Group (SPX) 6,025.00p -2.82%
Barratt Redrow (BTRW) 375.70p -2.52%
Smurfit Westrock (DI) (SWR) 3,318.00p -2.18%
Croda International (CRDA) 2,797.00p -2.17%
Legal & General Group (LGEN) 254.90p -2.04%
ICG (ICG) 2,126.00p -2.03%
easyJet (EZJ) 496.80p -1.93%
JD Sports Fashion (JD.) 84.52p -1.90%
Babcock International Group (BAB) 1,050.00p -1.78%
Taylor Wimpey (TW.) 109.50p -1.75%
FTSE 250 - Risers
Bakkavor Group (BAKK) 239.00p 7.66%
Mitie Group (MTO) 141.80p 3.20%
Ocean Wilsons Holdings Ltd. (OCN) 1,440.00p 2.86%
Indivior (INDV) 1,200.00p 2.30%
Pennon Group (PNN) 535.00p 1.71%
Ocado Group (OCDO) 320.30p 1.55%
Mony Group (MONY) 206.60p 1.27%
HICL Infrastructure (HICL) 125.40p 1.13%
W.A.G Payment Solutions (WPS) 88.20p 0.92%
Senior (SNR) 199.20p 0.71%
FTSE 250 - Fallers
Kier Group (KIE) 199.60p -4.95%
Raspberry PI Holdings (RPI) 445.80p -3.84%
RS Group (RS1) 560.00p -3.03%
Jupiter Fund Management (JUP) 128.80p -2.87%
Oxford Instruments (OXIG) 1,934.00p -2.62%
Vistry Group (VTY) 597.20p -2.51%
Just Group (JUST) 129.80p -2.41%
Computacenter (CCC) 2,222.00p -2.20%
ITV (ITV) 77.85p -2.20%
Bridgepoint Group (Reg S) (BPT) 318.00p -2.15%