Profit taking keeps Footsie down
A wave of profit taking pushed the London market into negative territory today and away from another three-year high.
The FTSE 100 Index saw gains of more than 26 points steadily eroded throughout the afternoon until the market finally closed 0.8 points down at 5314.5.
Weak demand for oil stocks and an adverse reaction to jobs data in the United States were among the reasons for the sudden swing in sentiment.
But progress earlier in the week meant the Footsie secured a third consecutive week of gains.
After a hectic fortnight for corporate news, analysts are now predicting a quieter time for the market but the quarterly inflation report from the Bank of England next week could spark shares back to life.
Barclays rounded off the results season for the big four banks in the UK by announcing better-than-expected half-year profits of £2.69 billion.
Investors looked beyond a 20% rise in bad debt provisions to send the stock clear at the top of the Footsie risers board, up 3% or 17p at 576p.
The results also led to a more positive stance towards Royal Bank of Scotland, which lifted 21p to 1649p following a fall of 4% in the session yesterday.
With yesterday’s cut in interest rates also boosting sentiment, Northern Rock rose 4p to 825p and Halifax owner HBOS cheered 8.5p to 895.5p.
But oil stocks were sluggish throughout much of the session and Royal Dutch Shell ended the day 5p lower at 1855p and BP weakened 4.5p to 637.5p.
The aviation sector was in focus after British Airways and low-cost rival easyJet updated the market.
BA impressed with its first quarter results, but news of a £75 million increase in its fuel bill meant shares were down 4.5p at 286p.
EasyJet was flying high after flagging up the possibility of a higher profits performance. Shares lifted 6% or 14.25p to 265.25p.
But it was left trailing in the second tier by media buying agency Aegis whose shares were boosted by rumours that French advertising firm Havas is lining up a takeover bid.
Aegis surged 10% or 11p to 125.25p after investors noted that French billionaire Vincent Bollore – the chairman of Havas – had bought 6% of the company’s stock. Another media-based stock, Taylor Nelson Sofres, was dragged higher by the speculation – up 7p at 208p.
The takeover spotlight also fell on Laura Ashley, which cheered 8% or 1p to 13.75p on speculation that one of its shareholders had approached other major investors about the possibility of taking the home furnishings retailer private.
Among other companies reporting results, bakery group Greggs dipped 114p to £45.11, a fall of 3% after a 15% rise in half-year profits was overshadowed by a sluggish start to the company’s second half.
The biggest Footsie risers were Barclays up 17p to 576p, International Power ahead 4.75p to 225.25p, InterContinental Hotels up 11.5p to 744p and Amvescap ahead 5.75p to 375p.
The largest fallers were Kingfisher down 6p to 248.25p, ICI off 7p to 289.5p, Dixons down 3.25p to 155p and Next off 31p to 1540p.
