FTSE 100 Watch: Footsie in Positive Territory Despite Barclays Slump

on Jul 30, 2013
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iNVEZZ.com Tuesday July 30th: The Footsie edged up today as upbeat earnings from ITV, Weir and GKN offset a slump in Barclays and BP. At 12.20 BST the blue-chip index was 17.79 points or 0.27 percent higher at 6,578.04.

**Barclays** was the top faller in the morning with the shares plunging by more than seven percent to 286.90p after the bank announced that it would sell ₤5.8 billion of rights, more than what analysts expected. The UK’s second largest bank by assets also posted a 17 percent decrease in its first-half pre-tax profit to ₤3.59 billion, below the ₤3.7 million forecast from a Bloomberg survey. Barclays also plans to issue ₤2 billion of “contingent capital” bonds that convert into shares or are wiped out if the bank gets into trouble (Barclays’ Share Price Plunges on ₤5.8 Billion Cash Call Announcement).

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**BP** lost ground today after it reported a drop in underlying replacement cost profit for the second quarter of 2013 to $2.7 billion (₤1.8 billion) from $3.6 billion (₤2.3 billion) in the same period last year. The result came below market expectations of $3.4 billion (₤2.2 billion). BP attributed the disappointing performance to lower oil prices and to an “unusually higher underlying effective tax rate” (BP’s Share Price Predictably Slides in London as Q2 Profit Drops). Shares in the company were down by five percent to 443.95 at 12.55 BST.

Sentiment in the banking sector suffered following Barclays’ announcements with **Royal Bank of Scotland** and **Lloyds Banking Group** declining by 2.12 percent and 2.33 percent to 318.70p and 67.10p, respectively. “I don’t think RBS and Lloyds have got the same issues in terms of immediate capital requirements – I don’t think that’s what the market is saying… the news out of Barclays today has just given the sector a bit of a shakeout,” commented Matt Basi, trader at CMC Markets.

!m[Upbeat Earnings From GKN and ITV Support The Blue-Chip Index](/uploads/story/4438/thumbs/pic1_inline.png)
On a more positive note **ITV** reported that it had recorded improved margins and double-digit growth in the first six months of the year. First-half earnings before interest, taxes, amortisation and exceptional items (EBITA) increased by 11 percent year-on-year to ₤291 million. Adjusted profit before tax was ₤270 million, up 16 pecent compared to the same period last year (ITV Share Price Surges on Rise in First-Half Revenue and Profits).

**GKN’s** shares surged by 5.81 percent to 346.10p after the supplier of aircraft parts reported that sales advanced 12 percent to ₤3.9 billion in the first half, topping the average analyst forecast of ₤3.7 billion. Pretax profit climbed by five percent to ₤278 million as both Airbus and Boeing increased their production to record levels, benefiting major suppliers such as GKN.
**The FTSE 100 was 18.07 points or 0.28 percent higher at 6,578.32 as of 30.07.2013, 13.30 BST.**

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