Rise in pound sees Footsie close lower

Market report Perry Gourley

The FTSE 100 closed down despite the US market surging to a record high in early trading.

The London index edged down 12.23 points to close at 7,411.43 weighed down by a stronger pound and a drop in Standard Chartered shares as investors lamented the bank’s decision to withhold a shareholder dividend.

Standard Chartered shares dropped 51.2p to 795p despite a 93 per cent leap in half-year profits, thanks to restructuring efforts, with investors lamenting news the bank would not resume dividend payouts amid “regulatory uncertainties.” The group said it would review its dividend policy at the end of the year.

David Madden, a market analyst at CMC Markets UK, said: “Seeing as the business is bouncing back, investors now feel it is time to reinstate the dividend.”

Rio Tinto fell 99p to 3,403p after earnings came in shy of expectations. The Anglo-australian firm said underlying half-year earnings soared by 152 per cent.

BAE Systems dropped 16.5p to 590.5p after the defence giant warned that it would take a charge in the second half for overhauling its cyber and intelligence arm, where revenues are “softening”.

William Hill surged 15.4p to 268p despite reporting an 11 per cent fall in pre-tax profits to £109 million in the six months to 28 June, while revenue grew 3 per cent to £837m.

The biggest risers on the FTSE 100 were Old Mutual, up 5.6p at 203p, ITV, up 4.3p to 175.8p, Paddy Power Betfair, up 175p to 7,875p, and Kingfisher, up 5.4p to 302.3p. The bookmaker’s shares were in demand after it reported increased revenues and said investors would enjoy a rise in dividends. The publisher came under pressure after its shares were downgraded to ‘underweight’ from ‘neutral’ by analysts at Jpmorgan.