Markets: Ex-divis drag on FTSE

The London market drifted lower despite signs that Europe is following the UK in building an economic recovery.

The FTSE 100 was down 24.51 points at 6,587.43, although some of the biggest firms going ex-dividend accounted for most of the drop.

Ben Critchley, sales trader at IG, said: “Another day of directionless trading highlights just how difficult it is to work out market sentiment during the dog days of August.

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“Eurozone economic figures and UK unemployment data seemed to be injecting a shot of optimism into proceedings but the positive atmosphere waned in the afternoon as US equities once again failed to begin the session in any strong fashion.”

In thin corporate news, Eurasian Natural Resources was among the heaviest fallers after it blamed poor pricing conditions and higher finance costs for the dip in both revenues and profits for the first six months of the year. Its shares closed down 3 per cent, or 7.2p to 229.3p.

However, the recent health of resource stocks based on improving industrial sentiment in China filtered through to pumps and valves maker Weir Group, which advanced almost 2 per cent 2,292p.

Royal Bank of Scotland was the biggest blue chip riser, up 3.5 per cent or 11.7p at 344.75p, after ratings agency Fitch weighed in against splitting the business into “good” and “bad” banks. Peer Lloyds Banking Group was also on the up, adding 1.36p at 77.14p.

Outside the top tier, shares in pest control firm Rentokil Initial jumped 6.1 per cent after it highlighted an improved profits performance in the second quarter of the year. With the company no longer saddled with loss-making parcels arm City Link, adjusted profits improved and pushed shares 5.95p higher, to 103p.