FTSE hits one-month high as Covid fears fade

With rays of sunshine replacing torrential rain, the good weather appeared to improve spirits among traders on London’s leading market.

Lingering fears over coronavirus were overshadowed by optimism as the FTSE 100 closed the day up at a one-month high.

The FTSE 100 closed up 28.74 points, or 0.4%, at 7161.04.

There were similar scenes in Europe, with the Cac 40 in France up 0.19% and the German Dax 30 up 0.21%, despite some pretty poor economic sentiment survey results in the country.

Michael Hewson, chief market analyst at CMC Markets UK, said: “Cautious optimism continues to outweigh concern about rising Delta variant rates in Asia, and to a lesser extent the US.”

In company news, the leading index of shares in London was dragged up significantly by Paddy Power revealing a boom in business in the US.

The company is benefiting from relaxed gambling laws in the States, with revenues growing by 159% across the Atlantic.

As a result, sales hit more than £3 billion – beating analyst expectations and sending shares up 1,010p, or 7.8%, to 13,950p.

Elsewhere, Holiday Inn owner InterContinental Hotels Group said it was starting to see green shoots of recovery, with revenue per available room beating 2019 levels in nearly half of its hotels.

Revenues rose 16% and it returned to profitability in the first six months of the year of £48 million, compared with a £199 million pre-tax loss during the first half of 2020. Shares closed down 30p at 4,705p.

Housebuilder Bellway saw its order book grow to record levels, although the number of houses it built remains below pre-pandemic levels.

The company revealed revenues are still 2.5% lower than before Covid-19 hit, but is up 41% to £3.1 billion in the 12 months to the end of July compared with a year earlier.

Shares closed up 42p at 3,352p.

Watches of Switzerland revealed a strong boost in sales despite the pandemic forcing foreign tourists away from stores, replaced by domestic Rolex enthusiasts instead.

Sales hit £297.5 million in the 13 weeks to August 1 – up 96.2% on the same period last year when stores were shut for parts of the coronavirus lockdown. Shares closed up 34p, or 3.32%, at 1,058p.

Office group IWG enjoyed a boost in business with increased demand for hybrid working spaces alongside a strong recovery in the US.

Revenue was 19% lower at just over £1 billion in the first six months of the year, but pre-tax loss narrowed from £237 million to £163 million, the company said.

Investors were pleased with the signs of recovery, with shares up 8.6p, or 2.7%, at 328p.

And car dealer Marshall Motor saw its profit hit a new record in the first six months of the year, as the business made £39.5 million before tax. The figure was a swing from last year’s £10.7 million loss. Shares closed up 2p at 246p.

The biggest risers on the FTSE 100 were Flutter, up 1,010p at 13,950p; Informa, up 24p at 532p; Taylor Wimpey, up 4.3p at 178.5p; Weir, up 39p at 1,679p; and Johnson Matthey, up 67p at 3,004p.

The biggest fallers were M&G, down 7.3p at 230.8p; Abrdn, down 6.9p at 290.8p; Next, down 128p at 7,944p; Fresnillo, down 11p at 772.2p; and Intertek, down 66p at 5,254p.