- FTSE closes down 43.44 at 6,730.11
- Eurozone CPI comes in at 0.4%
- UK house prices rise slowest since April 2013
techMARK 2,764.95 -0.52%
FTSE 100 6,730.11 -0.64%
FTSE 250 15,495.64 -0.86%
The FTSE 100 suffered a drop in both early and late trade, ultimately closing 43.33 points lower at 6,730.11 as investors digested Argentina's default, Russian sanctions and turbulence caused by concerns about US monetary policy.
The raft of company news out early on also steered the index, with losses for both Schroders and Weir offsetting the gains seen by the likes of Shell and Intu Properties.
Also weighing on sentiment today was data out from the Eurozone that showed the flash estimate for the region's consumer price index had declined to 0.4% annually.
"It's a lagging indicator so the recent drop in EUR/USD from 1.40 to 1.34 should cause relatively higher import prices and increase inflation in the coming months," CMC market analyst Jasper Lawler said.
It came after Argentina on Wednesday missed a deadline to pay $539m in interest after failing to agree on an accord with creditors from its last default in 2001.
"While terrible news for the Argentine people, the default is likely a non-event in the long run for markets due to the relative unimportance of the Argentine economy and minimal likelihood of bond market spill over," Lawler continued. "The Argentina default is just another thorn in the side of market confidence today."
Indications of sooner-than-expected rate hike hits sentiment
Wednesday night's announcement from the Federal Reserve saw it talk up the US economy as it voted to continue to slowly cut quantitative easing by reducing monthly purchases of Treasurys and mortgage-related assets to $25bn per month from $35bn previously. The Fed said that while the labour market was improving, it still had room to grow.
Analyst Rob Wood at Berenberg Bank said: "We expect the Fed to hike interest rates no later than April next year."
In Thursday's session, US initial weekly unemployment claims rose by a less-than-expected 23,000 in the week ended 26 July to 302,000, according to the US Department of Labor. The consensus estimate had been for a reading of 300,000. The previous week's estimate was revised sharply lower to 279,000.
A separate report revealed that manufacturing activity unexpectedly fell in July. The Chicago purchasing managers' index declined to a reading of 52.6 from 62.6 in June, well below forecasts of 63.5, but above the 50 level that signals expansion.
UK house prices rise in July slowest since April 2013
British house prices rose at their slowest rate since April 2013 this month. Prices increased by 0.1% in July, down from 1% in June, but still the 15th month in a row of rises, according to the Nationwide Building Society's monthly house price index.
Annual house price growth stayed in double digits, but slowed to 10.6% from 11.8% in June.
Shell rises after Q2 profit beats expectations
Shares of oil major Royal Dutch Shell jumped after it smashed analysts' estimates with its second-quarter profits. Shell, which has a market cap of around £156bn at current prices, said that earnings on a current cost of supplies basis surged to $5.1bn in the three months to 30 June, up from $2.4bn the year before, helped by higher liquids production volumes and prices.
First half net rental income rose £8m year-on-year at Intu Properties, helping to lift underlying earnings from £68m to £72m as the letting market showed "encouraging signs of improvement". During the six-month period, the market value of the shopping centre owner's investment properties increased 16% from £7,624m to £8,843m, while net asset value (NAV) per share climbed 7.5% from 346p to 372p, well ahead of forecasts of 344p.
Defence group BAE Systems rose after it posted lower half-year sales and profits but in line with expectations but did not deny rumours that it could revive its collapsed merger with Airbus. BAE, which builds submarines, warships and parts for the Eurofighter Typhoon and F-35 Joint Strike Fighter, reported a 10.6% drop in sales to £7.6bn from £8.5bn in the six months to 30 June and said underlying pre-tax earnings came in 7.5% lower at £802m versus £867m last time, all largely in line with expectations.
Meanwhile, even though it unexpectedly hiked its half-year dividend 50% to 24p, shares
in the asset manager Schroders dropped into the red after it sounded a note of caution about the retail investor market. While chief executive Michael Dobson said July had seen "good inflows" and cited a "significant pipeline" of institutional business, the company's outlook statement was not altogether positive.
Schroders warned that "the short-term outlook for retail investor demand is uncertain given no clear trend in markets", although in the longer term it was encouraged by a wide range of growth opportunities across the business.
Lloyds was lower as investors engaged in a round of profit taking as underlying profits improved by 32% to £3.82bn in the first half of the year. The analyst consensus was for an underlying profit of £3.6bn. On a negative point, which may have soured the interest of some investors, impairments for souring loans decreased 58% to £758m.
FTSE 100 - Risers
Royal Dutch Shell 'B' (RDSB) 2,555.50p +2.67%
Intu Properties (INTU) 328.80p +2.65%
Royal Dutch Shell 'A' (RDSA) 2,441.00p +2.46%
ITV (ITV) 208.70p +2.05%
GlaxoSmithKline (GSK) 1,436.50p +0.81%
Next (NXT) 6,770.00p +0.74%
BAE Systems (BA.) 427.80p +0.66%
Pearson (PSON) 1,141.00p +0.62%
BP (BP.) 484.00p +0.47%
easyJet (EZJ) 1,295.00p +0.39%
FTSE 100 - Fallers
Schroders (SDR) 2,390.00p -4.36%
Weir Group (WEIR) 2,567.00p -3.79%
St James's Place (STJ) 726.50p -3.77%
Tullow Oil (TLW) 728.50p -3.57%
Glencore (GLEN) 360.05p -3.08%
CRH (CRH) 1,387.00p -3.07%
Tesco (TSCO) 258.00p -2.97%
Lloyds Banking Group (LLOY) 74.25p -2.83%
Aggreko (AGK) 1,720.00p -2.77%
Capita (CPI) 1,202.00p -2.67%
FTSE 250 - Risers
Laird (LRD) 289.10p +7.99%
Dignity (DTY) 1,381.00p +3.60%
Fidessa Group (FDSA) 2,085.00p +3.01%
Hochschild Mining (HOC) 163.00p +2.64%
Workspace Group (WKP) 612.50p +2.42%
Genus (GNS) 1,047.00p +2.05%
Barr (A.G.) (BAG) 663.00p +2.00%
Wetherspoon (J.D.) (JDW) 743.50p +1.99%
Atkins (WS) (ATK) 1,332.00p +1.91%
Domino's Pizza Group (DOM) 547.00p +1.86%
FTSE 250 - Fallers
Afren (AFR) 110.00p -26.08%
Balfour Beatty (BBY) 237.90p -5.86%
Man Group (EMG) 119.00p -5.63%
Carillion (CLLN) 334.30p -5.35%
Pace (PIC) 319.90p -5.19%
Kazakhmys (KAZ) 324.80p -4.58%
IP Group (IPO) 181.30p -4.58%
Supergroup (SGP) 1,019.00p -4.23%
Beazley (BEZ) 244.40p -3.82%
ICAP (IAP) 347.80p -3.63%