US news sparks late Footsie rally

LONDON FTSE 100 CLOSE 5,873.21 +16.63

SHARES in London staged a late rally to close higher yesterday as investors took heart from lower US jobless figures and better housing data.

The FTSE 100 index had been in the red until about 4pm but clawed back its losses during the final half-hour of trading to close up 16.63 points or 0.3 per cent at 5,873.21.

Hide Ad
Hide Ad

Will Hedden, sales trader at IG Index, said: "Despite experiencing subdued performance for much of the day, the FTSE 100 headed into positive territory just before the close. Support came from an unlikely place as the banks benefit from some short-term bargain hunting."

Lloyds Banking Group mounted a 4.1 per cent rise to close up 1.76p at 45p, with Royal Bank of Scotland climbing 3.6 per cent or 1.27p to 36.28p and Barclays up 6.9p or 3.1 per cent at 227.9p.

The dollar strengthened to $1.633 versus the pound after the US labour department said applications for unemployment benefits fell to a three-month low. Pending home sales also edged up 2.4 per cent in June.

Utility giant Centrica sank to near the foot of the share index after it revealed a 54 per cent plunge in profits at its residential arm, which trades as both Scottish Gas and British Gas. Shares lost 2 per cent or 7.3p to close at 313p.

Some upbeat results from blue-chip firms including BAE Systems, BT and Rolls-Royce also helped boost the mood.

BAE Systems set the pace with a gain of 6 per cent, up 14.3p to 306.8p, after it raised its half-year dividend by 7 per cent in a sign of confidence in prospects, even though interim profits were lower due to one-off charges.

Telecoms giant BT said first-quarter profits lifted 20 per cent on the back of strong demand for broadband products. Shares cheered 7.2p to 197.9p.

Oil and gas giant Shell improved 2.5p to 2,275p after the latest bumper haul from the sector saw the firm's second-quarter profits surge 77 per cent to just under 5bn. Analysts said the results were in line with forecasts.

Hide Ad
Hide Ad

Shares in outdoor equipment retailer Blacks Leisure - which traces its roots back to 1861, when founder Thomas Black set up his sail-making business in Greenock - came under pressure, falling 11 per cent or 1.5p to 11.8p. The fall followed reports that suggested high street rival Sports Direct was looking to beef up its outdoor wear offering, which continued to put off investors.Sports Direct was down 4.2p at 258p.

Edinburgh-based online dating website operator Cupid rose 1.9 per cent or 4.25p to 225p after analysts at Numis Securities reiterated their "buy" recommendation following management presentations at the Scottish firm's Ukraine office.

Fellow technology stock I-Design fell 1p to 55p after Scottish Enterprise made the most of the firm's recent run of good form and sold 10,000 of its shares in the Dundee-based cash machine software company, taking its holding down to 8.9 per cent.

Two Scottish food and drink makers issued pre-close updates ahead of interim results, with Lees Foods down 5p to 184p after warning of lower profits and Irn-Bru-maker AG Barr 17p lower at 1,285p after increased spending on its brands and delays to upgrades at its Cumbernauld bottling plant hit margins.

Related topics: