Barclays, International Consolidated Airlines and Foxtons

“The FTSE 100 falls 19 points to 6,702 in early trading as it is dragged down by oil and gas, mining and utility stocks,” says AJ Bell Investment Director Russ Mould.

“Barclays’ international exposure and diverse business model will shelter it from any Brexit fall-out; at least that is what’s implied by the bank in its half year results. In stark contrast to Lloyds’ warning yesterday about an uncertain outlook, Barclays said there was no reason to change any of its plans in light of the EU referendum outcome. The one-third drop in quarterly net profit year-on-year to £803 million wasn’t as bad as feared, hence why the shares have rallied today.

“Forget fears about Brexit pressure on banks, property funds and housebuilders, the airline sector has been the real bearer of bad news over the past month. Shares in airlines have been in rapid descent amid a drop in earnings and fears about over-capacity in the industry. British Airways-owner International Consolidated Airlines adds to the gloom with second quarter earnings below expectations. Airline stocks were among the first parts of the market to experience rapid share price declines when UK economic conditions started to deteriorate in 2007/2008 and it seems that trend could be playing out again. There are also bigger issues to consider such as a rise in terrorism putting people off travelling and the weaker pound. It would be a brave person who wants to invest in this part of the market at the moment.

“Having issued a profit warning on 27 June citing ongoing pressures in the property market, London estate agent Foxtons today revealed the extent of its pains. Pre-tax profit for the first half of 2016 was down 42% to £10.5 million. There is no dividend growth and it may slow down expansion plans. A key metric for estate agents is sales transaction volumes which are down 10.2% in the six month period. That explains the huge dent in its earnings when you consider the type of commission it makes from houses sold for £573,000 on average.”

These articles are for information purposes only and are not a personal recommendation or advice.