FTSE sees slow day despite RBS high

State-owned Royal Bank of Scotland hit a nine-month high today, but the wider London market paused for breath after its recent strong run.

RBS raced ahead by more than 5% thanks to an upgrade from broker Oriel Securities and in the wake of its pension cost saving moves announced yesterday.

But an otherwise quiet day for corporate news offered little direction for the FTSE 100 Index, which closed down 26.2 points at 4890.6.

America’s benchmark Dow Jones Industrial Average also struggled for momentum, down 0.1% in early trade despite reports showing jumps in US home sales and factory orders.

Wall Street had ended the previous night’s session up slightly after US consumer confidence figures beat expectations and home prices rose 1.4% for the month of June, the second consecutive month of gains.

Investors remain cautious on the prospects for a global economic recovery and there are fears thin holiday season trading has skewed the big gains on the markets recently.

Among London stocks, advertising giant WPP was one of the day’s losers after cautious comments on the prospect of an upturn, while services group Serco lifted 6% after a strong update.

The part-nationalised banks joined the risers amid a period of climbs for the state-backed institutions.

Royal Bank of Scotland set the pace for a second session in a row, up 2.85p to 56.6p – adding to the taxpayer’s paper profit on its 70% shareholding – while the renewed hopes of an economic rebound lifted Lloyds Banking Group 0.64p to 108.47p.

The pair were joined on the risers board by services group Serco, which led gains after impressing investors with a 33% rise in half-year profits and a record order book of almost £17bn (€19.4bn). Shares jumped 27.3p to 482.3p.

WPP was suffering losses after it reported a 47% drop in half-year profits and said revenues were likely to be flat next year, despite big events such as the FIFA World Cup and US Congressional elections. Shares dropped 7.5p to 512.5p.

Miners and commodity stocks weighed the top tier down, with silver producer Fresnillo seeing a 33p drop to 604p as it also turned ex-dividend, meaning new investors will not be able to participate in the next divi payout.

Oil prices falling back to around $71 a barrel hit oil giants BP and Royal Dutch Shell, down 5.45p to 527.55p and 1p to 1659p respectively.

Elsewhere, the UK’s largest pawn broker H&T was enjoying a 9% share price hike after posting a 52% rise in underlying profits to £8.4 million in the six months to June 30.

Shares rose 22p to 263p.

The biggest Footsie risers were Serco up 27.3p at 482.3p, Royal Bank of Scotland ahead 2.85p at 56.6p, Schroders up 29p at 1097p and Diageo up 25p at 996.5p.

The biggest Footsie fallers were Fresnillo down 33p at 604p, Antofagasta off 37.5p at 752p, Cairn Energy down 107p at 2479p and Xstrata down 35.5p at 825.5p.