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FTSE 100 lower at lunch but Barclays shines

Last updated: 12:20 29 Jul 2016 BST, First published: 06:59 29 Jul 2016 BST

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MID-SESSION

UK big caps were doing worse than their smaller cousins at the midday point but Barclays (LON:BARC) was topping the leader board.

FTSE 100 was 16 down at 7,705 at the time of writing, with the bank's shares up well over 7% to 157.45p a pop.

Investors overlooked a 21% slide in profits and focused instead on the bank’s reassuring comments about future trading.

In the junior market, FTSE AIM 100 was up 0.03% to 3,613, while the FTSE AIM All share was flat at 754.220.

Joshua Mahoney, at IG Index, notes the fall in Footsie but says market may look beyond the short term affects from the Bank Of Japan.

"With the chance of a BoE rate cut currently priced in as 100%, we are not far away from a fresh bout of monetary stimulus in the UK, which would arguably provide more of a boost to UK markets than any action in Japan."

"Today’s session is all about GDP data, with the Eurozone, US and Canada all disclosing their Q2 figures today," he added.

Latest figures showed  economic growth from the Eurozone halved in the second quarter, but the single currency area moved away from the feared deflation.

Publisher Pearson (LON:PSON) was the biggest loser, shedding over 10% to 867.5p.

The planet's  largest education group reported that its restructuring plans were on track, but revenues for the first half were down.

The group was “making good progress on the programme of work we began in January to simplify the company and return to growth” according to chief executive John Fallon.

Elsewhere, Foxtons Group PLC (LON:FOXT), the London focused estate agent dropped over 8% to 114p  as it saw  pre-tax profits falling 42% in the first half, which the group blamed on a slowing London property market, thanks to the EU referendum.

In small cap world, IronRidge Resources (LON:IRR) flew almost 19% higher to 15.75p as it posted a maiden bauxite resource from Queensland, Australia.

Westminster Group (LON:WSG) the managed services and security specialist added also almost the same (18.87%) to go to 22.75p.

Oiler Gulf Keystone Petroleum, which rose almost 18% to 4.60p after the Kurdistan-focused oiler received a US$300mln bid approach.

 

OPEN

FTSE 100 was lower at the off as traders were disappointed by the Bank of Japan's moves and mining stocks took a hit, though not in small caps.

The blue-chip bench mark sank over 16 to 6,704, with publisher Pearson the biggest laggard , down over 6% to 910p.

Its first-half sales and revenue missed consensus estimates.

The FTSE AIM 100 lost 0.07% to 3,609, while the FTSE AIM all-share lost 0.04% to stand at 753.920.

Banking titan Barclays (LON:BARC) took to the podium as top Footsie riser, adding over 5%  to 153.95p, as the core business reported pre-tax profits of £3.97bn, up 19% while the non-core business made a loss of £1.9bn.

In small caps, IronRidge Resources (LON:IRR) rose almost 18% to 15.63p as it posted a positive maiden bauxite resource from Queensland.

But that couldn't prevent the wider junior market from trailing, although mining firms Rare Earth  Minerals (LON:REM) gained over 17%.

Braveheart (LON:BHR), the investment group,  was the top London riser, adding over 20% to 8.75p  as it continues the good run of recent days.

Opening snapshot

A relatively subdued start to London's blue chip index, as the FTSE 100 opened 10 points lower this morning to 6,710.     

The top winner was Merlin Entertainments (LON:MERL) up 1.5% to 474p. Profits at the Alton Towers owner rose in the first six months of the year as it cashed in on the weaker pound.

International Consolidated Airlines Group SA (LON:IAG) was the biggest loser, down almost 3% to 398p. The British Airlines owner said the weak pound cost it €148mln (£124mln) in the latest quarter of trading.

Elsewhere, Barclays (LON:BARC) announced pre-tax profits had dropped by 20%, due to the cost of disposing of its non-core businesses as part of its restructuring to focus on its UK and the US operation. Nonetheless the bank's were up almost 4% higher as investors probably expected much worse.

EDF Energy's plans to install a nuclear reactor at Hinkley Point were hit by a surprise delay, after the government called a last minute review.


Preview at 6.59am

‘That don’t impress me much’. It’s the title line to Shania Twain’s biggest hit to date, but it summarises reasonably eloquently investor sentiment towards the latest moves by the Bank of Japan overnight.

There certainly weren’t fireworks as the BoJ stopped short of making bond purchases and cutting interest rates in its latest round of fiscal intervention and instead sanctioned an increase in purchases of exchange traded funds.

The almost half-hearted intervention left Asia’s main markets flat to marginally lower.

“Even the Japanese stock market, which is the single biggest beneficiary of the policy change saw shares drop, with the Nikkei choppy before falling nearly 1%,” observed CMC Markets’ analyst Jasper Lawler.

Here in London the FTSE 100 is set to open 1.5 points off at 6,722.56.

One possible source of volatility later could be the results from stress tests carried out by the European Central Bank on the major financial institutions with the Italian banks expected to receive a great to deal of scrutiny from analysts.

Here in the UK, Barclays is expected to follow Lloyds by announcing a drop in profits as it updates on progress thus far this year.

Pearson and Reckitt Benckiser draw the curtain down on a busy reporting week for members of Britain’s premier stocks index.

*Brent Crude down 8 cents at US$42.62 per barrel.

*Gold trading US$12 higher at US$1,344.30 per ounce.

*Pound worth US$1.3195.

City Headlines

*Oracle Chairman Larry Ellison, once a vocal critic of the new era of cloud computing, is set to make a personal profit of $3.5bn from his company’s takeover of cloud company NetSuite – FT.

*Almost 800,000 savers have cashed out more than £6 billion from their retirement pots since the Treasury introduced new pension freedoms 15 months ago, official figures reveal – Times.

*Ford has warned that Brexit means it will probably have to increase car prices to minimise a hit to its finances as the fall in the value of the pound eats into its earnings – Times.

Amazon has topped forecasts as its burgeoning cloud computing arm added to double-digit retail sales growth over the past quarter – Telegraph.

*Online advertising has fuelled a better-than-expected 21% jump in revenues for Alphabet, the parent company of Google – Telegraph.

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