London midday: Losses pared but geopolitics still a concern
London (Aug 8) UK stocks had pared early losses but were still firmly in the red by Friday lunchtime as risk-averse traders remained on the sidelines in light of heightened geopolitical tensions across the globe.
The FTSE 100, which closed Thursday at a four-month low of 6,597.37, was trading down 0.6% at 6,559.47 by midday, though it had bounced off an intraday low of 6,528.73.
Decent gains from banking and supermarket stocks helped limit the overall decline in London, while rising gold and silver prices helped support shares of precious metal miners.
Nevertheless, the news that the US has authorised airstrikes against Islamist militants in northern Iraq continued to weigh on market sentiment, as ongoing concerns about the Ukraine crisis rumbled on in the background.
US President Barack Obama said that America could not turn a "blind eye" to what he called a "potential act of genocide" of the Yazidi people, as he announced targeted strikes on Islamic State fighters.
Brent crude futures were up around 0.9% at $106.34 a barrel after the authorisation of airstrikes in Iraq, the second-largest OPEC producer.
Meanwhile, Israeli airstrikes in Gaza resumed on Friday morning, ending a three-day ceasefire, while Palestinian forces renewed rocket attacks. Militant group Hamas has said that Israel failed to meet its demands.
TUI Travel reports strong Q3 but shares drop
Travel tour operator TUI Travel declined despite saying it has delivered a strong result in the third quarter with like-for-like underlying profits up 21% on last year.
However, geopolitical concerns were continuing to dampen the wider travel and leisure sector with Thomas Cook, IAG and Easyjet all registering steep losses on Friday.
Specialty property and casualty insurer Catlin was a bright spark in morning trade after reporting a better-than-expected 118% increase in interim profits before tax to $318m.
However, Africa-focused oil explorer Afren sank after saying it has temporarily suspended operations at its Barda Rash field in Iraq due to the heightened regional security issues. The company said that non-essential field personnel are being withdrawn in a phased manner.
Miner Fresnillo was a high riser as gold and silver prices gained on the back of safe-haven demand. African Barrick Gold was also in demand, while Randgold Resources outperformed the wider market to trade flat.