- HSBC leads banks higher, Intertek rises, Afren plummets
- UK construction PMI beats forecasts
- Portugal concerns ease after BES rescue
techMARK 2,741.52 -0.36%
FTSE 100 6,677.52 -0.02%
FTSE 250 15,362.57 -0.26%
UK stocks fell slightly on Monday, ending lower for a fourth consecutive session as traders reacted to news that Russia will embark on new military excercises.
News that Portugal had stepped in to rescue failed lender Banco Espirito Santo and better than expected economic data initially helped to buoy the Footsie, but shares
Banks also benefitted from investors' warm reaction to the latest results from sector heavyweight HSBC, while product testing group Intertek also impressed.
The Footsie ended the session 0.02% lower at 6,677.52.
Given that the geopolitical tensions in Gaza and Ukraine were still firmly in the spotlight, there was still "a little caution in the markets", according to market analyst Craig Erlam from Alpari. He said: "Investors are a little concerned that the sell-off which started last week is not over and could lead to something much bigger."
From a technical point of view, Mike van Dulken, head of research at Accendo Markets, said: "While good to see a bounce, and bulls will be eyeing recent 6,835 highs, we await a decent break above 6,700 before ruling out merely a pause before another leg down to the 6,500 level."
Economic data on Monday showed that UK housing construction activity in July registered the sharpest rise since November 2003, led by a record pace of job creation and a shortage of supplies. The Markit/CIPS purchasing managers' index for the construction sector eased back to 62.4 in July from 62.6 in June, but still came in above the 62 forecast and well above the 50 level that signals growth.
Shares in banking giant HSBC gained strongly despite reporting a larger-than-expected 12% drop in first-half pre-tax profits to $12.34bn, with underlying profits down 4%. "Whilst regulatory uncertainty persists, our balance sheet remains strong and our continuing ability to generate capital supports both growth and our progressive dividend policy," the company's chief executive Stuart Gulliver said.
Sector peers Lloyds, Royal Bank of Scotland, Standard Chartered and Barclays were also in demand.
Product testing, inspection and certification group Intertek rose after saying that organic revenue growth should pick up in the second half. Financial results for the first half were weaker than last year due to currency movements and continued headwinds in the minerals and energy-related businesses.
Mining stocks advanced on the back of an improvement in sentiment towards the sector, with Glencore, Anglo American and Antofagasta making gains.
On the FTSE 250, Alent, Keller and Home Retail performed well after their interim results, while Telecity and Senior both disappointed.
Analysts at Canaccord Genuity on Monday lowered their target price on shares of Afren to 120p, from 150p, as they were "not cheap enough" for them following news of further corporate governance concerns at the Africa-focused miner. Said target equated to 70% of the broker's central estimate for the firm's net asset value and marked a 10% discount to where the broader sector is trading on the basis of their estimates.
FTSE 100 - Risers
Intertek Group (ITRK) 2,706.00p +6.83%
BG Group (BG.) 1,221.50p +1.08%
Glencore (GLEN) 359.75p +1.01%
Rexam (REX) 506.00p +1.00%
GlaxoSmithKline (GSK) 1,430.00p +0.95%
HSBC Holdings (HSBA) 635.00p +0.91%
Travis Perkins (TPK) 1,703.00p +0.83%
Royal Bank of Scotland Group (RBS) 352.50p +0.71%
Fresnillo (FRES) 941.50p +0.59%
AstraZeneca (AZN) 4,362.50p +0.55%
FTSE 100 - Fallers
International Consolidated Airlines Group SA (CDI) (IAG) 327.00p -3.31%
Hargreaves Lansdown (HL.) 995.50p -2.11%
British Sky Broadcasting Group (BSY) 858.00p -2.05%
Pearson (PSON) 1,114.00p -2.02%
IMI (IMI) 1,417.00p -1.94%
Barratt Developments (BDEV) 344.90p -1.88%
easyJet (EZJ) 1,275.00p -1.77%
Royal Mail (RMG) 420.70p -1.73%
Petrofac Ltd. (PFC) 1,093.00p -1.62%
Carnival (CCL) 2,115.00p -1.44%
FTSE 250 - Risers
NMC Health (NMC) 480.00p +4.12%
Man Group (EMG) 121.00p +3.60%
Perform Group (PER) 222.50p +3.49%
Home Retail Group (HOME) 167.60p +3.14%
Alent (ALNT) 340.00p +2.91%
Kazakhmys (KAZ) 323.40p +2.54%
IP Group (IPO) 188.00p +2.29%
Grainger (GRI) 219.10p +1.91%
RPS Group (RPS) 245.50p +1.87%
Phoenix Group Holdings (DI) (PHNX) 705.00p +1.81%
FTSE 250 - Fallers
Afren (AFR) 107.00p -6.22%
Telecity Group (TCY) 756.00p -4.42%
PayPoint (PAY) 1,040.00p -4.32%
Infinis Energy (INFI) 213.50p -3.83%
Interserve (IRV) 611.00p -3.63%
Imagination Technologies Group (IMG) 182.20p -3.60%
Hochschild Mining (HOC) 156.60p -3.45%
Domino Printing Sciences (DNO) 595.00p -3.25%
Dignity (DTY) 1,351.00p -2.74%
Bodycote (BOY) 669.50p -2.62%