Profit taking prolongs FTSE’s retreat

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THE FTSE 100 continued its retreat from near-record highs after a previous session that saw the London market’s biggest fall in a year.

Traders continued to take profits from the significant rises so far this year, sending the top flight another 42.45 points lower to 6,654.34.

David Jones, chief market strategist at IG, said: “It has been a sentiment-driven day, data being thin on the ground. Investors haven’t become fundamentally more bearish; what has changed is that we are finally seeing selling in noticeable amounts.”

Fashion retailer Next was one of the biggest fallers after a Morgan Stanley downgrade in the wake of a “fantastic decade”. The broker says the companywill continue to outperform its peers but is telling clients to switch to Marks & Spencer on valuation grounds. Next shares were 111p lower at 4,580p, while M&S improved 2.9p to 475p.

The banking sector was under pressure despite broker UBS raising its outlook due to a pick up in mortgage lending and recent comments from the state-backed players that they are able to tackle their capital shortfalls.

Shares in Royal Bank of Scotland and Lloyds were down by 10.2p to 327p and 0.5p to 60.1p respectively amid the market’s overall lacklustre performance.

In a quiet session for updates, airport security scanners and medical devices firm Smiths neared top of the risers board with a gain of 20p to 1,355p. That was after it reported underlying sales growth across all its divisions in the first nine months of its financial year, keeping it on track to meet City forecasts. Severn Trent joined it on the risers’ board as institutional investors said they were holding out for at least £23 a share in the takeover battle for the water company. It was 29p higher at 2,071p.

NEW YORK: On Wall Street, although the Dow inched up, the S&P 500 declined for a third day last night, with the three major US indices posting their first negative week since mid-April.

The Dow Jones industrial average edged up 8.60 points, or 0.06 per cent, to end at 15,303.10 while the Standard & Poor’s 500 Index dipped just 0.91 of a point, or 0.06 per cent, to finish at 1,649.60. The Nasdaq Composite Index inched down a mere 0.27 of a point, or 0.01 per cent, to close at 3,459.14.