Banks save FTSE from big falls as global stocks drop
The damage caused to the FTSE 100 by falls in the share prices of the UK’s biggest utility companies was offset by the rises in bank shares as a global sell-off continued on Tuesday.
Lloyds, Barclays, and NatWest all managed to register small but significant rises during the day, but they were not able to stop the FTSE from falling.
By the end of the day, the index had given back 0.6% of its value, closing down 46.15 points to end the day at 7,521.39.
The water companies languished towards the bottom of the index, with Severn Trent and United Utilities both struggling.
Earlier in the day, regulator Ofwat had revealed that some water companies were spending nowhere near their allowances to upgrade the system. United Utilities, however, had spent more than its allowance.
Meanwhile, analysts at Credit Suisse showed their power as Mondi’s shares dropped to the bottom of the FTSE 100 following a downgrade to the Swiss bank’s share price predictions.
Close to the other end of the FTSE, DS Smith rose significantly after Credit Suisse upgraded its outlook for the packaging company.
“It’s been another lacklustre and negative session for European markets, with investors keeping their gaze very much fixed on next week’s central bank meetings from the Federal Reserve, as well as the European Central Bank,” said CMC Markets analyst Michael Hewson.
“Having seen decent gains over the last few weeks, there appears to be little appetite to drive markets much higher in the short term, with modest profit-taking helping to keep a lid on things.”
In New York, the S&P 500 was down around 1% and the Dow Jones around 0.6% as markets closed in Europe.
The German Dax index dropped 0.7% while the Cac 40 in Paris lost 0.3% of its value.
By around the time stock markets were closing in Europe, the pound had risen around 0.3% against the dollar, allowing it to buy a little over 1.22 dollars.
In company news, SSP – which owns Upper Crust – said that it had returned to a profit as travellers venture back into train stations and airports.
The business said that the summer season had been busy, and posted an operating profit of nearly £92 million in the 12 months to the end of September, compared to a more than £300 million loss a year earlier.
Revenue had jumped by more than 160% in the same period, the company said on Tuesday.
The biggest risers on the FTSE 100 were Rolls-Royce, up 2.9p to 93.49p, Phoenix Group, up 15.2p to 611.4p, Barclays, up 2.48p to 158.76p, BAE Systems, up 10p to 826p, and DS Smith, up 3.6p to 308.9p.
The biggest fallers on the FTSE 100 were Mondi, down 73p to 1,468p, Scottish Mortgage Investment Trust, down 24.4p to 755.8p, Endeavour Mining, down 53p to 1,697p, Dechra Pharmaceuticals, down 82p to 2,680p, and Halma, down 58p to 2,160p.
