Michael Taylor / Reuters
London: The FTSE 100 index of Britain’s leading shares edged down 0.6% on Thursday, 9 August , after US markets ended higher but a volatile final hour of trade overnight spooked UK traders.
With credit and interest rate concerns still at the back of many investors’ minds and with little on the economic calendar after a flurry of inflationary data earlier in the week, positive newsflow was hard to find.
At 0741 GMT, the FTSE 100 was 35.5 points lower at 6,358.4, to partly reverse a 1.4% climb on Wednesday. “We had a decent couple of days but it’s fair to say there has been a slight decoupling from the US — obviously they had that big fall on Monday that we didn’t mirror,” said Richard Hunter, head of UK equities at Hargreaves Lansdown.
“(But) as a general rule of thumb, we’ve certainly been following (Wall) Street on the way down although not necessarily on the way up.”
“Apart from the well-documented subprime crunch that the US has seen ... in the UK, we’ve got this period of uncertainty (over) whether inflation is being contained and therefore what the outlook for interest rates is.”
“It’s going to be a few weeks yet before it settles down,” he added. “We’re still pretty positive because ... corporate earnings remain extremely strong although some would argue that’s not necessarily been reflected in the way the markets moved because of this general uncertainty.”
Among companies, BAE Systems beat estimates with a 17% rise in first-half underlying profits on Thursday as its armoured vehicle business boosted growth.
Earnings before interest, taxes and amortisation (EBITA) rose to 700 million pounds ($1.42 billion), BAE said in a statement.
The company shares tacked on 3.2%.
Fund firm Schroders gained 3.4% to top the FTSE 100 leaderboard, after it said first-half pretax profit rose to 185.6 million pounds from 132.3 million pounds a year ago, helped by net inflows into higher-margin products.
Assets under management rose to 137.6 billion pounds at end-June from 128.5 billion pounds at end-December, the firm said in a statement.
On the downside, British-based power generator International Power was 4.1% lower after the company posted a 6.1% rise in first-half profit and said its second half performance was expected to be ahead of the first half.
International Power, which has interests in over 40 power stations, reported profit from operations for the six months to end-June of 416 million pounds ($844 million), as its business continues to perform in line with its expectations.
Among other utilities, Kelda Group lost 2.3% and United Utilities shed 2.2%.
—Additional reporting by Rebekah Curtis