Monday, July 31: FTSE indices started the day in the green, with utilities and miners lifting the FTSE 100, and the latter also lifting the FTSE 250. Brent crude rallied c.8.80% higher over the past week to the $52.33 mark, sparking an uplift in indices with commodity exposure. A raft of stock upgrades helped shore up the FTSE 100 before sterling strengthened in late afternoon trade absorbing most of the intraday gains, the FTSE 100 closed marginally higher(+0.05%). United Utilities(+2.84%) and Severn Trent(+3.28%) were beneficiaries of such upgrades, courtesy of RBC.
FDM(+11.64%) shares surged higher after the information technology services provider predicted it will “comfortably” beat full year expectations after a strong first half. Pretax profit for the six months to June end rose to £20.6m from £15.5m a year earlier as revenues climbed to £117.1m from £86.5m. The interim dividend was increased to 12p from 9.3p. FDM provides IT services in areas such as testing, business analysis and cyber security.
The number of new home loans approved in the UK fell in June to the lowest level in nine months, a sign the country’s housing market may be slowing as consumers refrain from spending. Approvals fell to 64,684 form 65,109 a month earlier the Bank of England stated. Separate data released by the BoE illustrated that UK citizens may be more wary of taking on long-term debt amid declining consumer confidence. Net of repayments, the data showed that consumers borrowed £1.5bn in June in personal loans, overdrafts and on credit cards. This was in line with the expectations of analyst polled by The Wall Street Journal. The June figure was lower than the £1.8bn seen the previous month, again signalling growing reluctance to borrow, but enough to keep the annual rate of growth in consumer credit at 10%. This sees consumer credit growth sustained at double digit levels, as BoE officials have previously warned lenders to monitor borrowers and ensure any debt can be serviced.