FTSE 100 Friday close: US shutdown dominates flat week

11th October 2013

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An end of week rally was not enough to bring the FTSE 100 back from a flat week of trading as the US political standoff dominated markets writes Philip Scott.

Friday followed Thursday’s gains with the UK benchmark index closing 1% or 56.7 points up on the day at 6,487.19. However a fairly muted series of sessions, meant the index was only up by 0.52% over the week.

After more than a week of the partial US government shutdown, on Thursday the Republicans came to the table offering US President Barack Obama a short-term debt limit increase to stop the US defaulting on its debt on 17 October. The extension however will only last for just over a month, until 22 November.

Excitement among investors reached fever pitch in the race for Royal Mail shares which were eventually given a starting price of 330p, valuing the business at some £3.3bn.

On Thursday, the Department for Business, Innovation and Skills confirmed that most members of the public would receive £750 worth of shares whether they applied for £750 up to £10,000. Yet those applying above £10,000 received nothing.  When conditional trading through brokers went live the stock rocketed by 38%. The full listing comes next week.

An upbeat note from Barclays on Costa Coffee and Premier Inn owner Whitbread, drove the businesses shares up 8% over the week to 3,210p, while miner Antofagasta, also on the back of positive analyst reports rose by 5% to 859p. But Persimmon was the highest flyer, also the beneficiary of positive reports, it soared by 11% to 1,197p

Barclays,  up 2% to 278p, added its name to the list of UK banks signing up to the government’s Help to Buy scheme as did HSBC, also 2% better at 689.6p.

Lloyds Banking Group, already committed to the scheme has agreed to sell its Australian operations to Westpac Banking Corp, the country’s second largest bank, for about £900m, its shares are up 1% over the week to 76.02p. For its part, Royal Bank of Scotland, added 1% to 376.9p.

BAE Systems, in its interim statement, this week said despite some snags over its deal with Saudi Arabia to supply 72 Typhoon jets, it still expects to achieve double-digit growth in underlying earnings per share. The shares however are among the week’s fallers after shedding some 3% to 436.3p. But Croda International’s endured the steepest fall on the leader-board, sliding 5% to 2,477p, after broker confidence in the chemical giant tapered back. Elsewhere retailer Marks & Spencer is off 1% at 477.7p while G4S also fell 1% to close at 243p.

Next week sees updates from BSkyB, miner Rio Tinto and Diageo.

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