Footsie treads water despite surge for RBS

Market report Perry Gourley

The Footsie ended the day flat despite shares in Royal Bank of Scotland (RBS) racing ahead following the UK Government’s move to slam the brakes on the bank’s sale of Williams & Glyn (W&G).

RBS jumped more than 6 per cent, or 16.5p to 258.9p, following an announcement of the Treasury’s proposals late on Friday that outlined an alternative £750 million plan to boost competition in the banking market in an attempt to appease officials in Brussels.

But while investors cheered the move, the wider FTSE 100 Index was flat, slipping 0.1 to 7,299.86 points.

Shares in Unilever slumped after US food giant Kraft Heinz called off its proposed £115 billion mega-merger with the consumer goods firm.

The Anglo-dutch company dropped more than 6 per cent, or 249p to 3,548p, following a joint statement by the two companies which said Kraft Heinz had “amicably agreed” to withdraw its proposal.

Kathleen Brooks, research director at City Index Direct, said managers at Kraft Heinz would be “spitting feathers’”after their proposed offer was leaked on Friday.

“We expect the chief reason to drop the bid was concern about the political atmosphere in Britain, which is currently against foreigners making bids for ‘national treasures’, even halfdutch ones like Unilever.”

The biggest risers on the FTSE 100 included Rolls-royce Holdings, up 42p to 708p, Hammerson, up 24p to 588.5p, and Antofagasta, up 21.5p to 858.5p. The biggest fallers included Pearson, down 26p to 642.5p. The commercial property firm increased its dividend despite announcing a fall in profits following a revaluation of its portfolio of shopping centres. Profits at the housebuilder fell after it took a £7m hit linked to “significant” customer complaints over the quality of homes.