MARKET REPORT: FTSE 100 index ends week above where it started – a performance that seemed highly unlikely after a dramatic sell-off in the opening session
The FTSE 100 index ended the week above where it started – a performance that seemed highly unlikely after a dramatic sell-off in the opening session.
The blue-chip benchmark fell more than 2 percent or 164 points on Monday as fears of rising coronavirus cases sent markets around the world into a tailspin.
But after a backlash as the week progressed, it closed another 0.9 percent, or 59.28 points, to 7027.58.
That will be a tonic for investors fearing the sharp sell-off at the beginning of the week that set the stage for a bloody summer in the stock market.
But with Covid still threatening the health of the nation and the economy, and inflation looming, those fears won’t completely disappear.
Indeed, the Footsie is still more than 8 percent below pre-Covid levels and more than 10 percent below its mid-2018 peak.
By contrast, the FTSE 250 is within a radius of its all-time high earlier this month, gaining 0.9 percent, or 206.11 points, to close at 22883.39. The number of retailers rose as the Office for National Statistics reported a 0.5 percent increase in sales in June, as England’s impressive streak in Euro 2020 rushed football fans to stock up on food and drink.
Marks & Spencer gained 1.7 percent or 2.3 pence to 140.4 pence, while Tesco rose 1.1 percent or 2.5 pence to 234.3 pence. Sainsbury’s (0.6 percent or 1.6 pence down to 279.1 pence) and bid target Morrisons (0.5 percent or 1.4 pence to 266.5 pence) underperformed.
Elsewhere on the High Street, Dixon’s Carphone was up 3.7 percent, or 4.5p, to 125.6p, and Next built on this week’s impressive gains – driven by a great trading update – with a 0.9 percent increase , or 72p, to 8092p. Fellow fashion retailer Ted Baker fell 1.1 percent or 1.5 pence to 136.2 pence, despite announcing plans to leave its King’s Cross base — called the Ugly Brown Building — for a Fitzrovia address, obviously the Gorgeous Brown Building.
The move to 101 Cleveland Street marks a major shift for the retailer, which has been based in King’s Cross for 20 years.
Natwest was in high demand after it agreed to sell some assets of its Irish branch – including 25 of Ulster Bank’s 88 branches – to Permanent TSB. Shares rose 2.5 percent, or 4.9p, to 199.1p as an incentive for the Treasury, which plans to sell another portion of the bank in the next 12 months, spiking taxpayer interest. in Natwest drops from just under 55 percent to about 40 percent.
The government’s sale of Natwest stock has been a long time coming. Taxpayers ended up holding more than 80 per cent stake after a £46bn bailout saved the lender – then called the Royal Bank of Scotland – from bankruptcy in 2008.
The higher the Natwest stock price, the more the Treasury will recoup, although it will still start with huge losses from its investment in the bank.
In the other direction was Fidelity China Special Situations, a major investor in Chinese technology stocks, which fell 4.1 percent or 16p to 371p as Beijing’s crackdown on internet stocks reverberated around the world.
Insurer Beazley posted a profit in the first half of the year after a loss in the same period last year, supported by an improvement in premium rates across all its divisions, and released £70m previously set aside for claims.
Lloyd’s of London insurer reported a pre-tax profit of £119 million for the six months to the end of June, compared to a loss of £10 million a year earlier. It declined to pay a dividend and said it will consider doing so at the end of the year, but with JPMorgan raising its price target from 452p to 473p, the stock rose 6 percent, or 21.5p, to 382. 5p.
Telit Communications held steady at 225p, despite private equity firm Dbay Advisers raising its bid from 220p to 229.5p this week.