Footsie slides despite interest decision
The Bank of England’s decision to hold interest rates failed to keep investors happy today as the benchmark FTSE 100 Index fell back into negative territory.
After uncertainty about rates saw early gains turn into losses, the widely-predicted decision at midday cheered traders and momentarily pushed the Footsie back onto positive ground.
But the euphoria was short-lived, as the Footsie fell back again to stand 6.4 points down at 4064 by lunchtime.
A steady stream of corporate news helped lift the early mood after yesterday’s 50.6 point fall, with engineering group GKN leading the risers.
GKN shares leapt nearly 5% or 10.25p to 230.25p after the company topped expectations with first-half pre-tax profits of £113 million up from £80 million a year ago and said its full performance would be in line with market expectations.
High street bank Barclays kept hold of its top spot on the risers board after it posted a 12% rise in profits and said it had cut bad debt provisions.
Shares in Barclays jumped more than 7%, or 33.75p to 469.75p, but its rivals felt an adverse impact, with Royal Bank of Scotland losing earlier gains to fall 19p to 1614p. HBOS lost 12.5p to 739.5p and Abbey National was off 8.75p at 544.75p.
Among insurers, Royal & Sun Alliance topped the list of Footsie fallers, dropping 4.25p to 132.75p, and Friends Provident lost 3.25p to 129.25p, but Legal & General climbed 0.75p to 96.5p.
Supermarkets cashed in, with Sainsbury up 4p at 277.5p, Safeway advancing 2.75p to 265.75p and Morrison’s ahead 2p at 188.5p.
Smith & Nephew continued to benefit from its announcement yesterday that it did not plan to raise its bid for Swiss artificial joints maker Centerpulse, with shares up 11.5p at 410.75p.
Publishing group Reed Elsevier was also prominent in the top flight, up 13p at 482p after its results topped expectations.
However, that had a negative impact on industry rival and Financial Times publisher Pearson, which fell 14.5p at 563p.
Outside the top rank, no-frills airline easyJet lost height after announcing that passenger figures climbed steadily last month, but the proportion of seats filled declined. Shares were off 0.5p to 231.5p.
Investors also lost their taste for bakery chain Greggs as it flagged up potential problems ahead after seeing sales melt away due to recent “unfavourably hot weather” that cut demand for pies and pasties. The shares cooled nearly 6%, or 187.5p, to 3012.5p.
