FTSE 100 continues rebound but Royal Bank of Scotland falls again

Leading shares are heading for their best week since December 2011, but banks continue to miss out on the post-Brexit bounce.

Concerns about a UK recession and comments from Bank of England governor Mark Carney hinting at a possible interest rate cut in the summer have revived worries about the outlook for the banking sector.

So Royal Bank of Scotland is down 5.5p at 166.1p and Barclays is 2.95p down at 135.65p.

Housebuilders, another sector which has yet to really benefit from the market’s revival, are turning in a mixed performance. Barratt Developments has lost 5.4p to 400p but Persimmon has put on 9p to £14.56.

Mining shares are also under pressure, after weaker than expected Chinese manufacturing figures for June renewing concerns about the outlook for the world’s second largest economy. BHP Billiton is down 20.3p to 922.5p while Antofagasta has fallen 8.1p to 457.5p.

But precious metal miners continue to benefit from the search for safe investments, with Fresnillo up 70p at £17.14 and Randgold Resources rising 235p to £86.45.

Overall the FTSE 100 has added another 19.55 points to 6523.88, its highest level since August. Michael Hewson, chief market analyst at CMC Markets UK, said:

European markets have started the day in a fairly positive fashion as we come to the end of what has been a turbulent and historic week. Having traded as low as 5,938 in the wake of last week’s surprising Brexit vote the FTSE100 looks on course to post its best week since 2011 as the weaker pound helped pull the index back above its pre Brexit vote highs by the middle of the week. While it is no doubt true that on a currency basis the FTSE100 is still down in euro and US dollar terms, the fact that it is one of the highest yielding blue chip benchmarks at over 4% could well be providing a pull factor in an era of ever decreasing interest rates.

Among the mid-caps animal genetics firm Genus has jumped 105p to £16.70 after analysts at Liberum moved from hold to buy and raised its target price from £15 to £17.50. They said:

The shares have not been immune from Brexit but Genus’s business should be fairly immune. Only around 10% sales are generated in the UK and weaker sterling should a drive at least a 7% translation boost to profits which is reflected in our forecasts. [There are] three new technologies which we think will transform Genus’s growth (Sexed semen, IVF in cattle and Gene editing). Finally, we believe current trading is solid with robust US and China hog markets offsetting weaker conditions in Latin America and, especially, dairy.

Transport group Stagecoach - which reported results this week - is down 23.1p at 208p after JP Morgan cut its rating from neutral to underweight in the wake of the Brexit vote, citing weaker sterling and lower UK economic growth.