The FTSE 100 fell by 0.3% last week as concerns about the US debt crisis and trouble in the euro-zone breed caution from businesses. The benchmark share index fell 18.66 points, barely managing to hang on to the 5,900 level.
Banks and insurance providers were the biggest losers this time, with Barclays falling 3.2% and Banco Santander reporting a 21% drop in profits as the cost of the PPI mis-selling scandal continues to emerge. Aviva was down 1.6% as fears continue to abound over the possibility of the US defaulting on its debt and doubts emerge regarding the latest rescue package proposed for Greece.
The mining industry gave the index a prop against falls in other areas, with investors seeking the relative safety of precious metals. Randgold Resources saw a 1.3% increase as the price of gold hit a record high for the 6th time in two weeks, and Lonmin, a platinum mining company saw its rating with Credit Suisse raised from ‘underperforming’ to ‘neutral’ on the grounds of improved valuation.
Software firms also saw big gains; Autonomy rose 5.2% and is now expecting to beat its current targets for profit in the forthcoming quarter. Market strategists theorise that if the US debt crisis resolves itself quickly August could turn out to be one of the best months so far this year..