The FTSE couldn’t build on yesterday’s 7040 as the session began, investors perhaps reticent to do much before they get a glimpse at the latest UK borrowing figures. For November the public sector net borrowing reading is forecast to rise to £12.2 billion from £4.8 billion in October, news that is unlikely to improve the mood this morning. As for the pound, after a sharp decline on Tuesday the currency has continued to fall. Against the dollar it shed 0.2%, leaving it just under $1.235, while against the euro it dropped 0.2%, keeping it below €1.19.
The DAX and CAC were just as flat as the FTSE this morning, both the German and French indices failing to budge after the bell. Nevertheless that keeps both at 16 month and 1 year highs respectively, meaning December still will be one of the year’s best periods even if a fully-fledged Santa rally doesn’t materialise.
Today’s focus may be once again on Monte dei Paschi. The world’s oldest bank is still struggling with its current recapitalization plan, raising just €500 million of the €5 billion needed through its debt-to-equity offer. Things seemingly became even more urgent this morning, as the bank warned that it could run out of liquidity within just 4 months. Unsurprisingly this did nothing to help the company’s embattled stock price, MPS plunging 5.6% as the day got underway.