City Watch: Brian Tora on how profit-taking and continuing rumblings in Europe have sent the FTSE 100 into reverse

Brian Tora of J M Finn & Co

Brian Tora of J M Finn & Co - Credit: Archant

LAST week was not a good one for our domestic market, with profit-taking seeing the FTSE 100 drift back to around 6250, having been nearly 300 points above that at one stage earlier this year.

True, we bounced back a little as this week began, but with continuing rumblings in Europe, there remains plenty on the sidelines to unsettle investors.

In Greece, some bank shares fell by around a third yesterday as a proposed merger between two operators hit problems and the decision of Portugal’s constitutional court to block proposed austerity measures further added to the confusion.

However, it is to the week ahead we should be looking. While there is little due on the economic front, there will be some interesting company news out later this week. Thursday appears the busiest day, with interim results from WH Smith, a trading update from Marks & Spencer and the BP annual general meeting taking place.

The figures from WH Smith will be the final ones presented by outgoing chief executive Kate Swann. She leaves behind a tightly run business where costs have been closely controlled, allowing it to flourish when many of its rivals have fallen by the wayside. Her 10-year tenure leaves the company in good shape and sets a tough challenge for her successor.

Marks & Spencer’s trading update is unlikely to be so upbeat. All the signs are that, while food has continued to make ground, clothing is very much in the doldrums. From being the place where women bought their underwear and men their socks, it is now better known as the home of the meal for two – with wine – at just £10. How things change.

: : Brian Tora is an associate with investment managers JM Finn & Co.

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