United Kingdom

MARKET REPORT: FTSE 100 index finishes week above where it started

The FTSE 100 index finished the week above where it started – a feat that looked highly improbable after a dramatic sell-off in the opening session. 

The blue-chip benchmark tumbled more than 2 per cent or 164 points on Monday as fears over rising coronavirus cases sent markets around the world into a tailspin. 

But after bouncing back as the week wore on, it closed up another 0.9 per cent, or 59.28 points, to 7027.58. 

That will be a tonic for investors who feared the sharp sell-off at the start of the week set the scene for a summer of carnage on the stock market. 

But with Covid still posing a threat to the health of the nation and the economy, and inflation threatening to rear its ugly head, those fears will not have disappeared altogether. 

Indeed, the Footsie is still more than 8 per cent below its pre-Covid level and down more than 10 per cent from its mid-2018 peak. 

By contrast, the FTSE 250 is within a whisker of the all-time high reached earlier this month, having gained 0.9 per cent, or 206.11 points, to close at 22883.39. Retailers were on the rise as the Office for National Statistics reported a 0.5pc increase in sales in June when England's impressive run in Euro 2020 sent football fans rushing to stock up on food and booze. 

Marks & Spencer gained 1.7 per cent, or 2.3p, to 140.4p while Tesco was up 1.1 per cent, or 2.5p, to 234.3p. Sainsbury's (down 0.6 per cent, or 1.6p, to 279.1p) and bid target Morrisons (off 0.5 per cent, or 1.4p, at 266.5p) fared less well. 

Elsewhere on the High Street, Dixons Carphone was up 3.7 per cent, or 4.5p, to 125.6p, and Next built on this week's impressive gains – triggered by a stellar trading update – with a rise of 0.9 per cent, or 72p, to 8092p. Fellow fashion retailer Ted Baker fell 1.1 per cent, or 1.5p, to 136.2p, despite announcing plans to abandon its King's Cross base – called the Ugly Brown Building – for a Fitzrovia address, named the Gorgeous Brown Building, obviously. 

The relocation to 101 Cleveland Street marks a significant shift for the retailer, which has been based in King's Cross for 20 years. 

Natwest was in demand after it agreed to sell a bunch of assets from its Irish arm – including 25 of Ulster Bank's 88 branches – to Permanent TSB. Shares rose 2.5 per cent, or 4.9p, to 199.1p in a boost for the Treasury which is planning to sell another chunk of the bank over the next 12 months or so, taking the taxpayer's holding in Natwest down from just under 55 per cent to around 40 per cent. 

The sale of Natwest shares by the Government has been a long time coming. Taxpayers ended up holding an 80pc-plus stake after a £46billion bailout saved the lender – then called Royal Bank of Scotland – from collapse in 2008. 

The higher the Natwest share price, the more the Treasury will recoup, although it is still starting at huge losses from its investment in the bank. 

Heading in the other direction was Fidelity China Special Situations, a big investor in Chinese technology stocks, which fell 4.1 per cent, or 16p, to 371p as Beijing's crackdown on internet stocks continued to reverberate around the world. 

Insurer Beazley swung to a profit for the first half of the year from a loss in the year-ago period, supported by an improvement in premium rates across its divisions, and released £70m it had previously reserved for claims. 

The Lloyd's of London insurer reported a pre-tax profit of £119m for the six months to the end of June versus a loss of £10m a year earlier. It refrained from declaring a dividend, saying it will consider that at year end, but with JPMorgan raising its target price to 473p from 452p, the stock rose 6 per cent, or 21.5p, to 382.5p. 

Telit Communications was flat at 225p despite private equity firm Dbay Advisers increasing its offer from 220p to 229.5p this week.

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