London pre-open: Stocks to edge up; borrowing figures in focus

(Sharecast News) - London stocks were set to edge up on Tuesday after a mostly firmer session on Wall Street. The FTSE 100 was called to open six points higher at 7,264.

CMC Markets analyst Michael Hewson said: "As we look ahead to today's European open the strong finish in the US looks set to translate into a similarly positive start here in a couple of hours' time, however it's difficult to escape the feeling that stock markets are starting to look increasingly vulnerable.

"Economic uncertainty in China, stagnation or weak growth in Europe and the UK, the only positives appear to be coming from the US where the economy is looking reasonably resilient, hence the rise in yields there. It's slightly harder to explain why yields in the UK and Europe are rising aside from the fact that rates are likely to stay higher for longer."

On the macro front, data from the Office for National Statistics showed that public sector net borrowing rose less than expected in July, to £4.3bn. This was up by £3.4bn on July 2022, but below the Office for Budget Responsibility's forecast of £6bn and consensus expectations of £5bn.

Capital Economics said: "July's public finances figures continued the recent run of better-than-expected news on the fiscal position.

"But with interest rates still rising and a mild recession on its way, we continue to think the Chancellor will struggle to unveil a large package of permanent tax cuts in the Autumn Statement while still adhering to his fiscal rules."

In corporate news, engineering and consultancy company Wood Group posted better-than-expected adjusted interim earnings, driven by a strong order book, and said annual profit would be ahead of forecasts.

Revenue rose 16% to $3bn for the six months to June 30 with adjusted core earnings up 8.5% to $202m.

Looking forward, Wood said adjusted core earnings margin were expected to be flat in the nearer term at around 7%, partly reflecting investments being made in the business and the level of low margin pass-through revenue activity

"As such, adjusted EBITDA for full-year 2023 is expected to be ahead of our previous expectations and within our medium-term target of mid to high single digit growth," the company said.

Woodside Energy reported a record first-half net profit after tax of $1.74bn and a positive free cash flow of $294m for the first six months of the year.

On the operational front, the company achieved record production, initiated first production at the Mad Dog Phase 2 Argos platform, and completed a major turnaround at Pluto LNG. Furthermore, Woodside progressed on several developments, including the Scarborough and Sangomar projects, approved investment decisions for the Trion and Julimar-Brunello Phase 3 projects, and advanced in new energy initiatives such as solar generation and carbon capture.