- FTSE closes up 23.31 at 6,821.46
- Retail sales in surprise dip
- Fitch comments lift banking sector
techMARK 2,822.06 -0.05%
FTSE 100 6,821.46 +0.34%
FTSE 250 15,748.69 +0.14%
London-listed stocks ended the day higher following a relatively steady morning of gains and a slight dip mid afternoon, with the FTSE 100 ending 23.31 points higher at 6,821.46.
The lift was driven in part by retail sales data and positive comments from Fitch on the banking sector.
Looking at the wider picture, Lewis Sturdy, a dealer at Capital Spreads, said: "The Eurozone provided some solid figures today, in particular strong services PMI proves that service sector firms are leading the recovery in spite of the Ukraine crisis.
"France on the other hand continues to struggle as new business contracted and companies have continued to release staff. A quick solution looks unlikely with the economy stuck in park."
Surprise dip in UK retail sales gives hope of BoE rate rise delay
UK retail sales rose less than expected in June as clothing volumes fell, according to figures from the Office for National Statistics (ONS), prompting investors to hope that the Bank of England may put off the much anticipated interest rate rise.
Sales including auto fuel increased 0.1% from May, compared to a forecast of 0.3% and fall of 0.5% the previous month. Clothing dropped 2%, as hot weather prompted stores to postpone discounting.
Fitch comments lift banks
Ratings agency Fitch gave the banking sector a rise today after it said that so-called Viability Ratings (VRs) on banks in European developed markets have improved since the start of 2014, "indicating early signs of recovery in European banks' intrinsic creditworthiness". VRs reflect Fitch's opinion on the likelihood that an entity will fail.
Improving macroeconomic conditions were partly responsible for this improved outlook, Fitch said, with banks' restructuring plans having contributed to the "stabilisation" of the Eurozone. For the first time since 2009, no country in the Eurozone is on Fitch's 'Negative Outlook'.
Also adding to the gains were changes in accounting standards, meaning the way banks recogise losses will move from an "incurred loss" to an "expected loss" approach.
Over in the States, initial jobless claims dropped by 19,000 to a seasonally adjusted 284,000 in the week ended July 19th, according to the Labor Department. It followed 302,000 claims the previous week and beat analysts' expectations for 310,000 claims.
"Looking ahead to the July employment report, scheduled to be released on Friday, August 1st, we look for headline and private non-farm payrolls to rise by 225,000 on the month," Barclays Research said.
Much less positive were new home sales figures, which came in much weaker than expected, down 8.1% to 406,000. Consensus was expecting 475,000. The May figure was revised downwards to a rise of 8.3% to 442,000, compared to the 18.6% rise to 504,000 as was previously thought.
"Altogether, this is a much softer report than expected and suggests housing demand has stabilized in recent quarters, as opposed to improving," Barclays Research said.
Reed Elsevier leads risers, Sainsbury subject of bid speculation
Reed Elsevier was the top riser after it reported a 4% increase in half year revenue at constant currency and a 5% increase in the dividend.
Shares in International Airlines Group climbed after an agreement was reached between the group and its main trade unions that could see as many as 1,427 jobs slashed at Iberia. Both pilots and ground staff will be affected, but cabin crew will not, it confirmed.
Banking group HBSC, RBS, Lloyds and Barclays were all lifted by Fitch's comments.
Sainsbury was also higher after market sources suggested Qataris are poised to make a bid for the supermarket chain at 500p or more per share.
Meanwhile, DIY retailer Kingfisher's like-for-like sales reversed into the red in the second quarter with trading "slower than anticipated", sending the group to the bottom of the pile.
Easyjet was another big faller despite the budget airline confirming its full-year profit will rise at least 14%, in line with City forecasts. The group anticipates its profit before tax for the year to September 30th will come in at between £545m and £570m, up from £478m last year.
FTSE 100 - Risers
Reed Elsevier (REL) 980.00p +4.37%
Carnival (CCL) 2,183.00p +2.34%
International Consolidated Airlines Group SA (CDI) (IAG) 342.90p +2.27%
HSBC Holdings (HSBA) 621.00p +2.26%
Barclays (BARC) 214.50p +1.68%
Mondi (MNDI) 1,051.00p +1.64%
Royal Bank of Scotland Group (RBS) 328.80p +1.61%
Antofagasta (ANTO) 847.00p +1.56%
Rio Tinto (RIO) 3,441.50p +1.49%
St James's Place (STJ) 793.50p +1.41%
FTSE 100 - Fallers
Kingfisher (KGF) 308.50p -8.18%
easyJet (EZJ) 1,333.00p -4.99%
Petrofac Ltd. (PFC) 1,152.00p -3.76%
Fresnillo (FRES) 919.00p -2.29%
Admiral Group (ADM) 1,507.00p -2.14%
ARM Holdings (ARM) 866.00p -1.65%
Hammerson (HMSO) 605.00p -1.63%
SSE (SSE) 1,480.00p -1.20%
Rexam (REX) 523.50p -1.04%
Pearson (PSON) 1,101.00p -0.99%
FTSE 250 - Risers
Howden Joinery Group (HWDN) 364.90p +17.11%
Lancashire Holdings Limited (LRE) 635.00p +4.87%
Phoenix Group Holdings (DI) (PHNX) 672.00p +3.38%
WH Smith (SMWH) 1,138.00p +2.80%
Kazakhmys (KAZ) 354.00p +2.67%
Domino Printing Sciences (DNO) 625.00p +2.63%
Renishaw (RSW) 1,848.00p +2.61%
Rightmove (RMV) 2,198.00p +2.23%
Essentra (ESNT) 777.50p +2.17%
Inchcape (INCH) 651.00p +2.12%
FTSE 250 - Fallers
Electrocomponents (ECM) 241.20p -6.58%
Ladbrokes (LAD) 132.30p -4.89%
William Hill (WMH) 339.00p -4.26%
Drax Group (DRX) 680.50p -4.15%
Perform Group (PER) 209.00p -4.13%
Tullett Prebon (TLPR) 244.00p -3.17%
Ocado Group (OCDO) 365.70p -3.13%
Polymetal International (POLY) 533.00p -3.00%
IP Group (IPO) 189.20p -2.97%
Imagination Technologies Group (IMG) 200.70p -2.76%