Weekly review
The FTSE 100 ended the week down by 42.21 points at 7,659.10.
Equity view
Paper manufacturer Mondi on Friday reported a 6% rise in interim pre-tax profits of €490m (£436m) due to higher average selling prices and solid demand across its packaging businesses.
Royal Bank of Scotland declared its first dividend in 10 years despite a mixed set of first half results, but generally beating City forecasts. The taxpayer-owned bank reported a profit attributable to shareholders of £888m for the first six months of the year, which was down 5.4% on last year. Operating profits in the second-quarter halved to £613m compared to the first quarter and the second quarter last year, but this was much better than expected, with City analysts having pencilled in a loss of £340m.
IAG reported second quarter operating profit of €835m before exceptional items, up from a restated €790m a year earlier but short of the €848m consensus. There was a net foreign exchange operating profit impact of €66m. The company’s operating profit before exceptional items for the half year was €1.12bn, up 17.4% from last year’s restated €950m.
Pets at Home reported a 6.1% rise in first quarter revenue on the back of higher-margin veterinary services. Group revenue growth of was 8.1% to £277.4m, the company said in a trading statement. Of this, £32.4m came from vet services, an increase of 18.4% year on year.
Bookmaker William Hill reported a big swing into the red as it took a £916m charge in the first half of the year after the government cracked down on fixed-odds betting terminals.
BAE Systems reported an order backlog of £39.7bn at the end of its first half, with £9.7bn of orders in the first half, down from £10.65bn in the year-ago period.
Hedge fund Man Group on Wednesday reported a 4. 2% jump in first half assets under management to $113. 7bn (£86. 68bn) despite a strong dollar and lower performance fee income.
Trading at Next slowed more than expected in the second quarter as the high street clothing group's online and overseas sales offset a persistent decline from its stores. For the 26 weeks to 28 July, full price sales rose 4.5% with online sales growing 15.5% and retail sales down 5.3%. Including markdown sales, total sales in the first half being up 3.9% on last year.
Thomas Cook guided towards the lower end of market expectations for its full-year underlying earnings on Tuesday, blaming the impact from hot weather in June and July and margin pressures on its tour operations in the Spanish islands, amid aggressive competition and bed cost inflation from hoteliers.
Economic news
The potential of a no-deal Brexit was "uncomfortably high" with severe consequences for the economy, Bank of England Governor Mark Carney said on Friday. As fears of the UK falling out of the European Union next Marc without any sort of framework on a future relationship heightened, Carney called on both sides to “do all things to avoid the prospect.
House of Fraser faces an uncertain future with a high risk of collapse after its potential new Chinese owner C. banner pulled out of the rescue.
The chancellor has told government departments to prepare for further spending cuts before next year’s spending review, putting him at odds with cabinet members who want to ease austerity.
UK services sector activity started the third quarter on a weak note, with Brexit-related uncertainties and also the recent World Cup and drier weather said to have acted as a drag, the results of a widely-followed survey showed. IHS Markit's Purchasing Managers' Index slipped from a reading of 55.1 for June to 53.5 in July, missing the consensus forecast for a reading of 54.7 by a wide margin.
International events
US spy satellites have detected new activity at a North Korean factory near the capital that produces ballistic missiles capable of reaching the US mainland, an official told The Washington Post on Monday.
Service sector activity in the US slowed sharply in July, the results of a widely-followed survey revealed. The Institute for Supply Management's non-manufacturing Purchasing Managers' Index printed at 55.7 for July, which was down from 59.1 in June and comfortably below the print of 58.6 which economists had penciled-in.
Economic growth in euro area in the second quarter was less than expected, with Spanish GDP expanding at its slowest pace for four years. Growth in gross domestic product printed at a disappointing 0.3% compared to the first quarter, with the market having pencilled in growth of 0.4%, there had been hopes that the slowdown in the first quarter reflected temporary factors.
Bitcoin fell briefly below $8,000 on Monday as investors lose interest in cryptocurrencies after enduring a selloff in mainstream technology shares in a sign that risk aversion might be having ripple effects.
The US and China are attempting to restart talks in a bid to avoid a full-blown trade war between the two economic blocks. According to Bloomberg News, on Tuesday, which cited two people familiar with the efforts, US Treasury Secretary Steve Mnuchin and his opposite number in Beijing, vice premier Liu He, were holding private discussions.