The U.K.’s top share index drew back from a three-week high last week, stopped the progress of a five-day winning streak with companies trading without the enticing attraction of their most recent dividend placing pressure on the broader market.
The effect of several major marketing firms including HSBC, British American Tobacco and Mondi, with regards to going ‘ex-dividend’ took approximately 11 points off the FTSE 100 index. Their shares slid between 1.2 and 1.9 per cent respectively.
The benchmark index closed down 0.4 % or 23.83 points higher at 6,755.48 points following the gains it profited for the past five consecutive days which climbed to its highest since the late second quarter.
The FTSE 100 was able to hit an all time high of 6,894.88 points in mid-May which was its highest level in more than a decade but has given up so much of that ground.
Investors are weary that a likely increase in interest rates in the U.K. would result in negatively affecting businesses and tighten consumer spending.
Minutes from the recent meeting of the Bank of England’s nine-member Monetary Policy Committee just released last week showed policymakers breaking ranks over for the first time in three years with two individuals unexpectedly voting to squeeze the said policy.
It considerably soiled the waters which if one member had chosen to vote for a rate hike, which they would have probably gotten away with it. Presently, they have two members sending off a powerful signal across the economy. However, the BOE is well aware of the fact that domestic demand would be openly susceptible in the event of quick rate hikes. It argues for a relatively slow pace of tightening.
U.K. housebuilders Persimmon and Barratt Developments, after it gained in previous sessions on hopes that the current housing market would be supported by lower rates for longer, slid 2.0 % correspondingly.
Analysts from Hantec Markets said that there they are optimistic to see the FTSE 100 getting back up the 6,834 point level, which would signal the market’s recent rebound with more strength and confidence.
Finally, among the sharp movers, Irish building supplies firm CRH plummeted 3.9 % following the Deutsche Bank severing its target price for the stock to 1,450 pence from 1,500 pence with a ‘hold’ rating. Should the FTSE fall over again within these levels, it would simply just predicate the drift that was seen in the past two month.