- FTSE closes down 24.64 points at 6,800.56
- Housebuilders hit by interest rate concerns
- US stocks fall despite decent PMI reading
techMARK 2,828.30 -1.14%
FTSE 100 6,800.56 -0.36%
FTSE 250 15,675.31 -0.74%
London's blue chips ended today's session in the red, hit by housebuilders, declines in the States early on and nerves about the situation in Iraq.
The FTSE 100 closed down 24.64 points at 6,800.56, having come off its intra-day low of around 6,786.65 seen this morning.
IG Market Analyst Chris Beauchamp said: "Markets have trimmed losses during the afternoon, but US indices are on the back foot despite a better reading from the manufacturing PMI.
"The FTSE 100 is doing its best to hold above 6,800, having rallied off its lows during the day as the early bout of selling in other European indices subsided. More interest rate commentary has hit housing shares, as David Miles undergoes a dramatic transformation from dove to hawk. The question is whether any others have flown from the dovecote as well, but the latest Bank of England (BoE) minutes didn't seem to indicate any tectonic shift in thinking."
Helping to drag the housing sector lower, the day's session saw the publication of a BoE survey, which has revealed that lenders expect the rate of household loan approvals to fall significantly in the third quarter. Some banks believe a tightening of mortgage standards will cause mortgage lending to slow next quarter, according to the central bank's quarterly Credit Conditions Survey.
The report comes after the Mortgage Market Review earlier this year introduced stricter tests to review a borrowers' ability to repay their mortgages.
In other macro news, a survey revealed that British consumer confidence hit a new high last month, but wage rises remain subdued and people are still feeling the economic pinch.
The Lloyds Bank Spending Power survey of more than 2,000 consumers reached a new record of 146 points in May, the highest since it launched in November 2010. Limited growth in essential spending, at only about 0.5% more than a year ago, has helped to ease the pressure on consumers' wallets, the report said.
Meanwhile, over in the States, manufacturing activity unexpectedly rose in June to highest level since May 2010, according to Markit's purchasing managers' index (PMI).
A preliminary estimate of the PMI showed an increase to 57.5 this month from a seasonally adjusted 56.4 in May. Analysts had predicted a fall to 56. A reading above 50 signals expansion.
Iraq tensions continue to weigh
US Secretary of State John Kerry has arrived in Iraq where he has reportedly been urging its Prime Minister to hand more government power to political opponents in a bid to end the crisis sparked by Sunni militants.
Kerry today met with Nouri al Maliki in Baghdad to help Iraq in its battle against the Islamic State in Iraq and the Levant (ISIS), which took over two key crossings in Anbar on Sunday, a day after seizing one at Qaim, a town in the province that borders Syria.
"Sunni militants are now moving closer to threatening Bagdad by taking control of nearby borders, this caused an early jump in crude oil
and forced a correction in stocks," CMC Markets UK's Jasper Lawler said.
"Later in the day, crude oil rolled over after it got technically overbought, but the poor PMI data in Europe meant sentiment was already too damaged for a significant turnaround in stocks."
IHG leads on takeover speculation
Shares in InterContinental Hotels Group was near record levels - and technical resistance - with brokers still citing takeover speculation in their reports to clients as the main catalyst behind the recent rise in the stock.
Deutsche Bank helped lift BG Group after it reitered its 'buy' recommendation for the stock and raised its target price from 1,250p to 1,400p. The broker said it believes that the best way to create value is for the company to demerge its liquefied natural gas (LNG) operations.
Technolgy giant ARM Holdings jumped after one broker predicted a rise in its royalties.
Meanwhile, house builders such as Barratt Developments, Persimmon and CRH were lower amid speculation about the near-term future of interest rates in the UK.
FTSE 100 - Risers
InterContinental Hotels Group (IHG) 2,368.00p +2.73%
BG Group (BG.) 1,270.50p +2.50%
ARM Holdings (ARM) 908.00p +2.14%
BHP Billiton (BLT) 1,938.00p +1.92%
Randgold Resources Ltd. (RRS) 4,900.00p +1.83%
Royal Mail (RMG) 492.40p +1.80%
Fresnillo (FRES) 861.00p +1.65%
Rio Tinto (RIO) 3,127.00p +1.61%
Antofagasta (ANTO) 779.00p +1.10%
United Utilities Group (UU.) 883.50p +0.97%
FTSE 100 - Fallers
Rolls-Royce Holdings (RR.) 1,053.00p -2.95%
Johnson Matthey (JMAT) 3,015.00p -2.74%
Barratt Developments (BDEV) 350.80p -2.72%
CRH (CRH) 1,579.00p -2.65%
AstraZeneca (AZN) 4,373.50p -2.16%
Royal Bank of Scotland Group (RBS) 330.00p -2.14%
Melrose Industries (MRO) 256.60p -2.06%
easyJet (EZJ) 1,423.00p -2.00%
Smith & Nephew (SN.) 1,059.00p -1.85%
William Hill (WMH) 334.60p -1.82%
FTSE 250 - Risers
Kentz Corporation Ltd. (KENZ) 929.00p +32.24%
Lonmin (LMI) 259.60p +4.51%
Vedanta Resources (VED) 1,161.00p +3.94%
Renishaw (RSW) 1,631.00p +2.26%
Howden Joinery Group (HWDN) 296.70p +2.24%
Ferrexpo (FXPO) 124.20p +1.97%
Euromoney Institutional Investor (ERM) 1,098.00p +1.95%
Grainger (GRI) 206.70p +1.62%
BH Macro Ltd. GBP
Shares (BHMG) 1,950.00p +1.56%
Ted Baker (TED) 1,755.00p +1.56%
FTSE 250 - Fallers
Barr (A.G.) (BAG) 635.50p -5.43%
Wetherspoon (J.D.) (JDW) 788.50p -5.11%
Rank Group (RNK) 167.00p -5.01%
Domino Printing Sciences (DNO) 738.00p -4.40%
Foxtons Group (FOXT) 268.00p -4.25%
NMC Health (NMC) 460.00p -3.77%
AL Noor Hospitals Group (ANH) 980.00p -3.73%
Restaurant Group (RTN) 578.00p -3.43%
Infinis Energy (INFI) 232.20p -3.37%
Betfair Group (BET) 976.50p -3.32%