Energy and bank stocks push FTSE 100 back below 5,000
THE FTSE 100 drifted lower yesterday, unable to stay above the 5,000 level as energy and bank stocks weighed heavily.
It closed down by 16.62 points, or 0.3 per cent to 4,987.68, having closed above 5,000 for the first time since late September 2008 on Wednesday.
“We’re taking a bit of a pause from what has been a pretty steady, momentum driven, corporate news driven market over the past short while, so I don’t think we’re looking at anything at this stage that’s terribly serious,” said Mike Lenhoff, chief strategist at Brewin Dolphin.
Energy stocks took the most points off the index, retracing sharp gains made the previous session. Heavyweights BP and Royal Dutch Shell were off 1.2 per cent and 0.6 per cent respectively.
With banks, it was a similar story, with the sector under pressure after Wednesday’s strong rally. HSBC, Royal Bank of Scotland and Lloyds Banking Group shed 1 to 1.9 per cent.
Food and general retailers were also out of favour, with traders citing profit-taking after the sectors’ recent gains. The FTSE 350 general retailers index has risen more than 62 per cent so far this year, compared with a 15.6 per cent rise for the FTSE 350 index.
Home Retail was the heaviest faller, off 6.7 per cent, after the household goods retailer reported better-than-expected second-quarter sales at both its Argos and Homebase businesses. Next, down 4.1 per cent, and Kingfisher, off 4 per cent, were the second and third biggest large-cap fallers.
Wm Morrison eased 0.3 per cent as the food retailer said it sees slower market growth in the second half with first-half profits up 22 per cent.
J Sainsbury fell 1.3 per cent and Tesco dropped 0.8 per cent.
Thomas Cook topped the FTSE 100 leaderboard, up 4.6 per cent, as creditor banks of insolvent German retailer Arcandor completed the placing of a 43.9 per cent stake in the travel firm.
The consortium of banks, which included BayernLB, Royal Bank of Scotland and Commerzbank, placed 376.63m ordinary shares in Thomas Cook at a price of 240p each, a small discount to Wednesday’s closing price of 245p.
Fellow tour operator TUI Travel rose 4.2 per cent, benefiting from the strong demand for Thomas Cook stock.
The Bank of England left interest rates at a record low of 0.5 per cent for the sixth month running and said it would keep its £175bn asset buying programme in place.