FTSE down 83.4 on the week as tapering fears take shine off though Fresnillo is silver lining

16th August 2013


The FTSE 100 index of the UK’s top firms lost more than one per cent of gains during the trading week as market volatility took its toll writes Philip Scott.

The top flight index closed on Friday at 6,499.99, up 16.65 points on the day but 83.4 points lower over the week mostly because spate of positive economic data in the US has escalated fears over the end of quantitative easing.

In equity markets, concerns over tighter central bank policy have weighed on US and UK bourses notes Patrick Gordon, senior investment strategist, at brokerage Killik & Co.

He adds: “In the UK, further signs of a strengthening recovery emerged this week as the RICS House Price Balance jumped from 21 per centin June to 36 per cent in July, while retail sales data were also better than forecast.

“Furthermore, although the 3-month unemployment rate remained unchanged at 7.8 per cent, the jobless data from July, including a 29k fall in jobless claims, suggests a decline in the unemployment rate could materialise in the coming months.”

On Thursday, the US suffered a day of troubled trading, where the S&P 500 slid almost 2 per cent as fears about the end of the Federal Reserve’s quantitative easing programme increased while a bout of disappointing corporate results did little to boost sentiment.

In Japan, the anticipation over the end of easy money globally and concern over corporate earnings saw the Nikkei 225 slide by more than 2 per cent mid week.

An Easyjet plane had to make an emergency landing after an engine cover fell off just after take-off. The stock slipped 9per cent to 1,257p, making it the week’s steepest faller.

Insurer Standard Life slipped 5 per cent to 346.2p, while Rolls Royce also off 5 per cent over the trading week closed at 1,121p. Embattled Security firm G4S, up 6per cent to 249.5p, was one of the week’s top risers after news emerged that hedge fund Cevian Capital had taken a large stake in the group.

Mining stocks once again had a better week, with Randgold Resources rising 9per cent to 5,150p while Glencore Xstrata, also enjoyed a week of gains, as its stock rose by4per cent to 308.35p.

But the week’s top riser was precious metals miner Fresnillo which soared by 13 per cent to 1,172p after it received a ‘buy’ recommendation from broker UBS.

Imperial Tobacco, which announced plans to launch an e-cigarette next year, saw its shares move 3per cent higher to 2,205p.

Among the banks, the 81 per cent taxpayer backed Royal Bank of Scotland was the highest climber, firming 5 per centto 343p. HSBC was flat at 709.1p, as was Barclays, closing at 288.05p while Lloyds Banking Group, climbed 2per cent to 76.4p.

Next week sees BHP Billiton and Glencore Xstrata update the market.

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