MARKET REPORT

THE London markets slumped as sterling made its first gains for five days, bouncing back from a two-year low.

The FTSE 100 closed 59.99 points higher at 7,586.78 points at the end of trading yesterday.

The value of the pound moved higher against the dollar ahead of the predicted US rate cut, although it dipped against the euro.

The pound was up 0.5% at 1.221 versus the US dollar, and down 0.26% at 1.112 against the euro.

The European markets have been supported by whispers that the European Central Bank will be accommodating when it meets in September.

The German Dax rose by 0.34%, and the French Cac was up by 0.14%.

In stocks, housebuilder Taylor Wimpey saw shares dive after it reiterated warnings over rising build costs. The company posted a 9.4% drop in underlying pre-tax profits to £299.8m for the six months to June 30 as rising build costs took their toll.

Shares in Taylor Wimpey closed 14.75p down at 161.8p.

Elsewhere, Lloyds Banking Group also drifted lower after it reported a 7% fall in half-year pre-tax profits as its bill for the payment protection insurance scandal soared past £20bn amid a surge in late claims.

It said pre-tax profits dropped to a worse-than-expected £2.9bn for the six months to June 30 after revealing another £550m hit from the mis-selling saga in the second quarter.

Shares in Lloyds fell by 1.75p to 53.3p at the close of trading.

The price of oil edged higher, after inventory from the American Petroleum Institute and the Energy Information Administration fell by more than expected. The price of a barrel of Brent crude oil rose by 0.12% to $65.04.

The biggest risers on the FTSE 100 were Next, up 448p at 6,064p, Rentokil, up 22.8p at 435p, Centrica, up 2.5p at 76.08p, and IAG, up 9.6p at 424.4p.

The biggest fallers on the FTSE 100 were Taylor Wimpey, down 14.75p at 161.8p, Fresnillo, down 52.6p at 601p, St James’s Place, down 59p at 984p, and Land Securities, down 29.2p at 796.2p.