Leading shares ended the week on a downbeat note, on continuing concerns about Greece’s finances, tension in the Middle East and uncertainty about the once reliable US economy.
The FTSE 100 finished down 40.31 points on Friday to 6855.62, making a 2.39% fall for the week just seven days after the index breached the 7000 barrier. The decline came despite European and US markets attempting to edge higher, and reflected the predominance of mining shares in the UK index.
The commodity sector was one of the day’s biggest losers as copper and iron ore slipped lower, and the oil price lost much of Thursday’s gains. Brent crude fell nearly 3% to $57.52 a barrel have been boosted the previous day by news of Saudi Arabia’s military action in Yemen.
Anglo American lost 32.5p to £10.44, Rio Tinto fell 67.5p to 2809.5p and BHP Billiton dropped 35p to 1507.5p.
Investors were also unsettled by the state of the US economy, with a revised fourth quarter GDP growth figure left unchanged at 2.2% when analysts had expected an increase to 2.4%. With a number of weaker than expected pieces of data, investors will be keen to hear any hints on the timing of interest rate rises from Janet Yellen, the chair of the Federal Reserve, when she speaks in San Francisco later.
Jasper Lawler, market analyst at CMC Markets UK, said:
UK markets underperformed on Friday falling into the red as the rest of Europe saw gains thanks to mining-sector weakness and without the direct underpinning from the European central bank asset purchases.
The FTSE 100 made a new record on Monday but it’s been all downhill from there.
Royal Bank of Scotland fell 7.2p to 343.1p as it sold the international business of its Coutts wealth manager to Switzerland’s Union Bancaire Privee.
But cruise company Carnival climbed 217p to £32.41 after better than expected results, helped by the plunge in oil prices over the past few months.
Barratt Developments dipped 1p to 536p as it said chief executive Mark Clare would step down at the start of July after nine years, to be replaced by finance director David Thomas. Robin Hardy at Shore Capital said:
David Thomas should be a good appointment (always good to have a Scottish accountant running things in our view) but hopefully this will lead to a little more dynamism on the strategy. Barratt is beginning to look a little unambitious in its plans after 2016 with minimal growth planned and it would be good to see the larger house builders being prepared to drive ahead a little more forcefully. Bellway has shown that the large house builders do not need to stagnate.
Finally Card Factory, which fell earlier in the week despite the greetings card retailer reporting a 9% rise in full year profits, recovered some ground. Investors had been hoping for news of a cash return, which was not forthcoming. But Nomura, which has a 300p target, said in a buy note:
We see a return of cash as highly likely, although timing, quantum and form have not been specified.
Traders also said a big seller had been cleared out, and the shares closed 4.7p higher at 297p.
