Friday appears to be a downbeat finish to the week and month for markets in the UK and abroad, as the FTSE 100 gave away 0.8%, falling to 7,022 points.
“It’s looking like a soggy end to July both in meteorological terms and with the markets as so-so numbers from Amazon and a sell-off in Asia linked to Covid concerns had a dampening effect on sentiment,” says AJ Bell financial analyst Danni Hewson.
Disappointing results from highly rated testing specialist Intertek and IAG, as well as a downbeat reaction to Natwest’s latest numbers, did little to lift the mood.
“The mining sector also slumped and investors continued to fret about the Chinese crackdown on its technology sector, despite Beijing’s efforts to dial back some of its recent rhetoric. There was talk about targeted rather than broad-based action,” said Hewson.
“As the flood of corporate updates on both sides of the Atlantic slows to a stream and then a trickle, we enter the summer lull for the markets – although this can be a dangerous time for equities.”
“With experienced investors away from their desks on holiday and trading volumes lower, it sometimes doesn’t take much for a market correction to begin and with Covid-19, inflationary pressures and regulatory crackdowns all in the background, there are a plenty of a potential catalysts for a sell-off.”
FTSE 100 Top Movers
Pearson (2.36%), the only company to get beyond a decimal place at the time of writing, along with Segro (0.96%) and Sage Group (0.92%), are leading the way on the FTSE 100 during the morning session.
At the bottom end, Intertek (-7.53%), IAG (-3.35%) and Weir Group (-2.97%) are dragging on the FTSE 100.
IAG
IAG, the owner of British Airways, confirmed on Friday that it fell to a €2bn (£1.7bn) H1 loss as travel restrictions continue to work against the airline.
The FTSE 100 firm flew at a capacity of 21.9% during Q2, while it is expecting this figure to rise to 45% for the coming quarter.
Natwest
NatWest will return more than £3bn to shareholders via dividends and share buybacks over the coming years, as the FTSE 100 bank swung into the black on the back of the brightening outlook of the UK economy.
The banking giant made a £1.6bn profit before tax for the three month period to June, swinging from a £1.3bn loss for the same period a year ago, surpassing analyst forecasts.