FTSE 100 close: Record-breaking week ends with a whimper

Although it broke records this week the FTSE100, slipped back from the highs, weighed down by underperformance in the banking sector, which has acted as a bit of a deadweight.

The blue chip index was at 7,994.94 down17.59 points or 0.22 per cent. The FTSE 250 was down 20,073.69, off 107.76 points.

There was also some weakness in the energy sector with BP and Shell acting as a drag, on the back of a 3 per cent decline in oil prices.

Michael Hewson, chief market analyst at CMC Markets UK, said: “Barclays shares slid back this week on the back of a set of disappointing numbers, while NatWest has seen an underwhelming reaction to a strong set of full year results, an increase in the dividend and a share buyback.

“Given the share price reaction today, it seems there’s just no pleasing some people even accounting for the disappointment over its guidance, which appears to be being blamed for today’s weakness.

In Q4, profits rose to an impressive £1.26bn, a big increase on the £187m in Q3, taking full year profits to £3.34bn, up from £2.95bn a year ago. Total impairments for the year rose to £337m.

“While there appears to be some disappointment over its future guidance in this regard, the guidance was predicated on a UK base rate of 4%. This comes across as unduly pessimistic given that we are likely to see another 25bps at the very least in March, potentially pushing NIM higher. The numbers certainly aren’t as dire as today’s share price declines would suggest, not to mention a dividend yield of over 4.5 per cent.”

“The bank proposed a final dividend of 10p as well as a share buyback program of £800m in the first half of 2023, taking the total amount paid to shareholders £5.1bn, or 53p per share, which is good news for the UK government which still holds a 48 per cent stake in the bank.

“This equates to a windfall for the UK government of £2.25bn, on top of the ordinary tax take which includes the bank levy and corporation tax.”

Segro shares topped the index despite reporting adjusted pre-tax profit of £386m an increase of 8.4 per cent, but which came in below market consensus expectations. The company which rents warehouse space continues to be in high demand to a range of companies, and which saw a 6.7 per cent rise compared to 4.9 per cent a year ago.