Damp squib for investors as FTSE falls on final day of July

The final trading day of the month ended like the weather – damp and uninspiring – as investors looked for inspiration but found none.

Average results overnight from Amazon in the US failed to spark excitement on Europe’s markets and renewed Covid fears in Asia also affected the mood as London’s leading index closed the day down.

The FTSE 100 closed down 46.12 points, or 0.65%, at 7031.3.

The French Cac and German Dax also closed the day down – falling 0.12% and 0.42% respectively.

Michael Hewson, chief market analyst at CMC Markets UK, said: “It’s been a disappointing end to the week, and the month for markets in Europe.”

He pointed out that whilst the FTSE 250 – which is typically made up of UK-focused businesses – has enjoyed record highs this month as Covid-19 restrictions eased and the economy recovered, the leading internationally focused index had less luck.

The analyst said: “We’ve seen very little way of progress in the FTSE 100, which looks set to finish July more or less where it started.

“We’ve seen moves in both directions, but they’ve lacked any sort of conviction, with the overriding concern being about whether the second half of the year will be able to match up to some of the decent numbers we’ve seen from various company updates this week.”

Those updates include a week of banking giants revealing soaring profits, including NatWest, which unveiled an operating profit before tax of £2.5 billion in the first six months of the year.

This was a swing from a £707 million loss in the same period last year and comes after strong results earlier in the week from Barclays and Lloyds.

Shares in NatWest closed down 2.5p at 202.4p on the day, although they had been rising for most of the week in anticipation.

Elsewhere, British Airways owner IAG posted an operating loss of 2.03 billion euros (£1.73 billion) for the half-year to June 30, representing a reduction from the 4.05 billion euro (£3.45 billion) loss it saw for the same period in 2020.

Bosses said they expect passenger levels to return to pre-pandemic levels by 2023, sending investors for the exits, with shares closing down 13.54p – a 7.45% drop – at 168.1p.

Deliveroo revealed plans to quit operating in Spain – which makes up 2% of sales – just four months after the government there announced that workers in the gig economy must be considered employees.

Shareholders seemed to like the idea, with shares closing up 5p at 330p.

Publisher Pearson revealed a 7% rise in sales to £1.6 billion in the first six months of the financial year, as bosses started their turnaround plans.

Pre-tax profit fell from £35 million to just £4 million but investors remain convinced over the company’s future direction, with shares closing up 25.6p at 869.4p.

And property portal business Rightmove enjoyed the soaring housing market, with pre-tax profits going from £62 million to nearly £115 million in the first six months of this year. Shares closed up 22p at 702.2p.

The biggest risers on the FTSE 100 were Rightmove up 22p at 702.2p; Pearson up 25.6p at 869.4p; London Stock Exchange Group up 172p at 7,490p; Segro up 22.5p at 1,217.5p and Croda up 146p at 8,420p.

The biggest fallers were Intertek down 448p at 5,156p; IAG down 13.54p at 168.1p; Intermediate Capital Group down 83p at 2,170p; Weir down 62p at 1,728p and Informa down 16.8p at 495p.