FTSE 100 close: Banks higher, WPP & miners fall
The FTSE 100 continues to flirt with the 5,000 mark as gains from banks help to offset dismal news from ad giant WPP.
Market watcher: The footsie has flirted with the 5,000 mark.
Royal Bank of Scotland led the footsie leaderboard with a 5.3% gain to 56.6p. Fellow government-owned bank, Lloyds banking Group, was up 0.64p to 108.47p.
Investors were seemingly pleased to see RBS slash the pension benefits of workers within it's final salary pension scheme, which will save the bank an estimated £100m a year.
Joining them among the highest risers was services group Serco, 6% higher at 482.3p after reporting a whopping 33% increase in half-year profits and a record order book of almost £17bn.
The doom and gloom came courtesy of WPP, the world's largest advertising group by revenue, which reported that profits had almost halved (down 47%) in the six months to 30 June thanks to a global slowdown in advertising spending. The results were at the bottom end of analyst's forecasts and WPP shares fell 7.5p to 512.5p on the news.
By the close, the FTSE 100 had fallen 26.2 points to 4,890.6.
The heaviest fallers included oil stocks Tullow Oil and Cairn Energy, down 3.9% to 1,053p and 4.1%% to 2,479p respectively, after Tullow reported an 83% drop in first-half profit on lower crude prices and production.
Miners were also lower, BHP Billiton (23p lower at 1,605p), Kazakhmys (27.5p lower at 917.5p) and Xstrata (35.5p lower at 825.5p) all losing Antofagasta fell 4.75% to 752p as the Chilean copper miner posted lower-than-expected first-half earnings and said copper prices were likely to remain volatile in the second half.
Rio Tinto said it was likely to open a mine in Serbia in five or six years to exploit jadarite, a mineral used to produce mobile phone batteries. Its stock fell nearly 4% to 2,381p.
Silver producer Fresnillo followed with a 33p drop to 604p, hit also as it turned ex-dividend, meaning new investors will not be able to participate in the next divi payout.
There is no UK economic data scheduled for today.
Tomorrow's agenda
Diageo, the spirits maker which is suing Sainsbury's for copyright infringement over the supermarket's Pitchers drink, claiming it is a copycat version of its own Pimm's, will reveal the effects of customers downgrading to cheaper alternatives at its full-year results. Analysts are upbeat, expecting the producer - the world's biggest spirits group whose other big brands include Guinness and Smirnoff - to report a rise in pre-tax profit to £2.2bn, up from £2.09bn last year.
Diageo has cut costs by around £100m this year, and announced plans to axe 900 jobs in Scotland, by closing the Johnnie Walker bottling plant and a distillery in Glasgow.
Engineering group IMI is expected to post a significant fall in organic revenue growth for the first half of the year. Analysts at UBS reckon it could drop 19%, and describes IMI's fluid power division as 'only marginally profitable'.
Miner Peter Hambro is reporting interim results, with analysts forecasting net profit to hit $37m (£22.6m). Canaccord Adams reckons its gold operations will put it on 'a new, and more solid financial footing compared to the past five years'. exploration firm Premier Oil, transport giant Arriva, Avis Europe, the car rental firm, and estate agent chain Savills are also set to report interim trading results.
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