FTSE 100 Friday close: Index loses ground ahead of Federal Reserve meeting

13th December 2013

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The FTSE 100 index of the UK’s top firms closed on Friday at 6,439.96, flat on the day but 2% down over the week as concern over the outcome of next week’s US Federal Reserve policy meeting gripped traders writes Philip Scott.

On the back of strong job and retail sales numbers from the US, as well as a surprise budget deal in Washington this week, many expect that a reduction in its quantitative easing strategy could now be imminent.

In Britain the week’s steepest fall on the leader board was endured by troubled insurer RSA, which witnessed its stock collapse by 9% to 92.5p.

On Friday its shares plummeted in early morning trading after it announced that its chief executive Simon Lee had quit the group, amidst controversy in regards to its Irish division.

In a statement the firm said that following its review of Irish reserves, it has found that they will need to be bolstered by £130m, the majority of which relates to bodily injury strengthening in motor and liability lines. This is on top of £70m previously required.

In November the group suspended the boss of its Irish arm Philip Smith, after uncovering financial irregularities. Smith has since resigned.

Sports Direct International was another of the week’s main fallers with its shares loosening by 7% to 702p despite announcing that group revenue was up 24%, to £1.3bn, with particularly strong growth in the like-for-like international store businesses as a result of new space openings and premium lifestyle stores. But it appears strong competition is reportedly taking its toll on the firm.

Miner Vedanta Resources’ also shed value over the week, dropping 8% to 775p, while support services group Aggreko lost 7% to 1,516p.

It was a bad week for banks as the 81% state-owned Royal Bank of Scotland, down 6% at 315.9p, was fined by US regulators for breaking sanctions via its dealings with customers in Iran, Sudan, Burma, and Cuba.

Lloyds Banking Group, 4% looser at 75.39p, was hit with a £28m fine by the Financial Conduct Authority for serious failings in the way it ran its bonus scheme for sales staff. Elsewhere, HSBC shed 2% to finish at 646.5p, while Barclays, dropped 5% to 251.45p

Fund and share broker Hargreaves Lansdown enjoyed a 6% jump over the week to close at 1,285p, as according to reports, analysts have upgraded their earnings forecasts as a result of October’s hugely successful Royal Mail flotation, of which it was a major beneficiary.

British Airways parent International Consolidated Airlines also enjoyed a week of gains rising 5% to 375p as did BAE Systems, 4% better at 434p while discount carrier Easyjet flew 3% higher to 1,474p after analysts at Goldman Sachs rated it a ‘buy’. Insurer Admiral and utility group SSE each gained 2% to close at 1,232p and 1,331p respectively.

Next week sees market updates arrive from Aggreko and Dixons.

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