FTSE 100 Friday close: Eurozone and US growth spooks investors

16th May 2014

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After reaching for the sky earlier in the week the FTSE 100 came back down to earth as concerns over growth in both the Eurozone and the US spooked traders.

On Tuesday the UK’s benchmark index jumped to 6,877.39, its best level since its all-time high in December 1999, before subsequently pulling back.

Any optimism that the Eurozone recovery was making progress was dashed as figures showed that the embattled region only managed 0.2% GDP growth in the first three months of the year, down from the previous quarter’s 0.3% while the news that US industrial production fell in April, also dampened spirits.

By the closing bell on Friday, the FTSE 100 index at 6,855.81 was almost 1% ahead over the week and just 14.92 points up on the day.

Easyjet endured the week’s steepest fall, shedding 10% to finish at 1,516p, after the discount carrier reported a pre-tax loss of £53m for the six months to 31 March, compared to a £61m loss for the same period a year earlier.

Downton Abbey broadcaster ITV was also off over the trading week, losing 9% to 172.5p despite reporting a 2% rise in total revenues during the first three months of the year. However it also noted that revenues at ITV studios fell 4%.

The firm is hopeful with the imminent arrival of the World Cup that advertising deals will rise in the second quarter.

House builders felt the brunt of the Bank of England’s quarterly inflation report this week with Barratt Developments down 9% at 344.3p and Travis Perkins 5% lighter at 1,629p.

While BoE boss Mark Carney reiterated his forecast of an interest rate rise sometime in the second quarter of 2015 he cautioned that the organisation would be keeping a watchful eye on mortgage affordability.

TUI Travel was also down, by 8% to 407.7p while Barclays was the main faller within the banking sector, losing 7% to 241.55p. Elsewhere Lloyds was down by 4% at 73.47p, Royal Bank of Scotland closed 1% off at 322.8p while Standard Chartered firmed 3% to 1,336p. Its primary Asian market competitor HSBC also enjoyed a weekly gain, rising 6% to 632.5p. The bank notably had to retreat on a decision regarding a previous offer to gives its chairman Douglas Flint a £2.25m award in shares.

Supermarket Morrison bounced back this week with its stock jumping 8% to 212.9p, as it became the subject of speculation that a US-led private equity takeover deal may be on the cards.

Tesco’s stock also closed the week better off after gaining 5% to 310.45p while drinks giant Diageo, also rose 5% to close at 1,942p.

The Pfizer / AstraZeneca, saga continued as the US drugs giant suggested it could up its offer for the British drug-maker if it would only engage in talks. Over the week, the UK firm is up 5% at 4,823.5p.

Next week sees updates arrive from designer Burberry, Royal Mail and Booker.

 

 

 

 

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