News Column

FTSE in strong start to second half of year

July 2, 2014

LONDON

The FTSE 100 Index made headway as positive economic news from China and the UK got the second half of the year off to a strong start.

Mining stocks drove the top flight higher after a monthly purchasing managers survey showed manufacturing activity in China grew for the first time in six months, lifting hopes for stronger demand in the world's number two economy.

Commodity-based firms occupied the top three positions on the risers board as the FTSE 100 Index recovered from recent weakness to stand 59 points higher at 6802.9.

Anglo American set the pace with a gain of almost four per cent or 57p to 1487p, while silver miner Fresnillo was 26.5p higher at 898.5p and Rio Tinto lifted 94p to 3202.5p. The other major economic news involved the UK manufacturing sector after the latest CIPS/ Markit purchasing managers' index survey for June gave a better- than-expected reading of 57.5, up from 57 a month earlier.

It was the best performance in 40 months and helped the pound rally against the US dollar to set a new five-and-a-half year high of 1.71. It was also stronger versus the euro at just above 1.25.

The upbeat mood in London meant gains for Lloyds Banking Group, which climbed 1.3p to 75.5p, while Aviva was 8.5p stronger at 519p.

Shares in Guinness and Smirnoff drinks firm Diageo were again higher amid market speculation linking it to a merger with SABMiller.

Diageo shares rose another 36.5p to 1902.5p while SABMiller improved by a more modest 27p to 3415p.

Supermarkets were under the spotlight after the latest till-roll figures from Kantar Worldpanel offered more disappointment from Morrisons and Tesco.

Shares in the pair were down 3.2p at 180.2p and 0.1p to 284.2p respectively after their sales and market share performance declined in the 12 weeks to June 23. Sainsbury's improved sales by three per cent on a year earlier but stock still fell 1.4p to 314.1p.

Greggs rose more than four per cent or 23.5p to 559.5p on signs that it is seeing a recovery in sales and profits. The sausage roll maker expects operating profits of around pound(s)16-17 million later this month, up from pound(s)11.5 million.

Shares in grocery delivery firm Ocado failed to rise despite the company swinging to a profit of pound(s)7.5 million in the first half of the year. It is on course for the first annual surplus in its history but concerns about the impact of price competition meant shares slid more than four per cent or 16.3p to 355p.

The biggest risers on the FTSE 100 were Anglo American up 57p at 1487p, Fresnillo up 26.5p at 898.5p, Rio Tinto up 94p at 3202.5p and Sports Direct International up 21p at 727.5p.

The biggest fallers on the FTSE 100 were Morrisons down 3.2p at 180.2p, Royal Mail down 7.8p at 491.2p, Tui Travel down 6p at 392p and Shire down 60p at 4510p.


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Source: Herald, The (Scotland)


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