US weakness prompts profit-taking

PROFIT-TAKING struck the FTSE 100 index yesterday after weaker-than-expected jobs figures from the United States gave
investors pause for thought.

The Footsie fell 34.11 points, or 0.5 per cent, to 6,647.87, retreating from an intra-day two-month high of 6,696.63.

About one-fifth of the turn-over of Britain’s blue-chip companies comes from the US, highlighting the importance of the world’s biggest economy to investors in London.

Myrto Sokou, analyst at Sucden Financial, said: “The FTSE has given back gains after four days following a fairly mixed US employment report. It is a bit of profit-taking.”

Bookmaker William Hill was 36p lower at 478.5p despite reporting a 4 per cent rise in half-year underlying profits to £156.2 million, driven by growth in online and mobile gambling.

Atif Latif, a trader at Guardian Stockbrokers, noted: “The weakness seems to be profit-taking. Overall we see the weakness today as a short-term reaction and expect the price to move back to fair value at 500p.”

The slide in William Hill’s share price came after a strong run for the stock, which has outperformed arch rival Ladbrokes. Ladbrokes, which reports half-year results next week, and was 3.3p lower at 214.2p.

Royal Bank of Scotland was also hit by profit-taking after swinging back into the black during the first half of the year.

Shares closed down 3.3 per cent, or 11p, at 322.5p – having fallen as low as 312.4p earlier in the session – after rising 5 per cent on Thursday on the back of Lloyds Banking Group’s 8 per cent jump. Lloyds eased back 0.27p to 73.73p.

Industrial firm Smiths Group took a tumble, down 5.5 per cent or 77p to 1,320p, after a takeover approach for its Smiths Medical division ended without a deal.
British Airways-owner IAG was the biggest riser in the FTSE 100 index – soaring 6.7 per cent or 19.9p to 317p – after signs of a recovery at its Iberia subsidiary in Spain.

Man Group, Europe’s largest hedge fund operator, jumped 9.5 per cent, or 7.95p, to 91.5p in the FTSE 250 index after its half-year results beat market forecasts.

The wider FTSE 250 continued to set fresh records, climbing 70.76 points, or 0.5 per cent, to hit 15,131.97.