26th July 2013
Following a strong run, the FTSE 100 took a breather this week as profit taking and concerns over China’s economy weighed on traders writes Philip Scott.
The news that China’s leaders were implementing a small stimulus package in a bid to boost its slowing economy, weighed on the blue-chip index this week. The FTSE 100 closed 33.16 points or half a per cent down on the day at 6,554.79. Over the week it is down by 1 per cent but the past month overall has seen a 6 per cent rise.
In more positive news it was confirmed that the UK’s economy is continuing to gain momentum. Official figures showed that Britain’s economy, or GDP, grew by 0.6 per cent between April and June, double the expansion of the previous three months.
On Friday BSkyB reported a positive set of results with revenues ahead of consensus and an increase in full year profits. It posted increased revenues of 7 per cent and saw pre-tax profits rise 5.7 per cent to £1.26bn. It moved 3 per cent lower on the day and over the week it is down by 4 per cent at 822p.
Also reporting this week was troubled pharmaceutical giant GlaxoSmithKline, currently embroiled in an alleged fraud and corruption scandal in China. Despite its woes it delivered upbeat half year results but still managed to loosen by 1 per cent on the day and by 3 per cent over the week at 1,664p.
The City Watchdog, the Financial Conduct Authority this week slapped the state-owned Royal Bank of Scotland, 3 per cent lower over the trading week at 328p, with a £5.6m fine. The troubled bank was hit with penalty for incorrectly reporting transactions it made in wholesale markets. The bank, which is more than 80 per cent taxpayer owned failed to correctly report 44.8m transactions between November 2007 and February 2013. In addition it was found to have failed to report more than 800,000 transactions at all, during the same period.
Elsewhere HSBC and Lloyds were each 1 per cent lighter over the week at 731.2p, and 68.37p respectively while Barclays was flat at 320.15p.
Dragging the index lower over the week were Tullow Oil, shedding 7 per cent at 1,025p, tech group ARM Holdings, down 6 per cent at 846p and chemical firm, Croda International, also 5 per cent off at 2,415p.
Climbers over the week included miners Glencore Xstrata, 3 per cent better at 281p, while Vedanta Resources firmed 5 per cent to 1,180p.
Media group and Financial Times publisher Pearson was the week’s biggest riser up just over 5 per cent to 1,329p. The firm has put its FT Group hub Mergermarket up for sale but asserted that despite some speculation to the contrary, the Financial Times remains a core part of its business. Companies updating the market next week include BP, Reckitt Benckiser and Centrica.