Weekly review

The FTSE 100 closed the week up 101.7 points at 6,775.08.

Equity view

Shares of online gambling company 888 Holdings surged on Friday after agreeing to buy Bwinparty Digital Entertainment in a cash and stock deal worth around £8983m, beating a higher offer from rival GVC Holdings.

Royal Mail’s shares declined on Friday as Ofcom suggested imposing a cap on prices on the postal service business.

Stock in Marks & Spencer slipped into the red after it announced that John Dixon, the head of General Merchandise, would step down from the board with immediate effect and leave the company on a day to be agreed, to pursue other career opportunities.

British Airways and Iberia parent International Consolidated Airlines Group moved a step closer to its takeover of Aer Lingus on Friday, as it announced that it’s been given the green light by just over half of its shareholders.

Mining giant Anglo American said it expects writedowns of around $3bn-$4bn in the first half of this year relating to its Minas-Rio iron ore operations in Brazil and certain Australian coal assets.

Dixons Carphone posted a 21% rise in pre-tax profit in its final results and said its integration was progressing well.

Barclays confirmed deputy chairman Michael Rake will continue to serve on the bank’s board until a replacement is found, following his appointment as chairman of payment processing company Worldpay.

Australian miner Rio Tinto scaled back its iron ore targets, citing weather disruption as impacting production.

Shares in Sports Direct International fell into the red as a better-than-expected 31% rise in pre-tax profit failed to offset a small miss on the revenue front and disappointment that the company has lowered its adjusted core earnings target for 2015/2016.

The UK government has cut its stake in Lloyds Banking Group to 14.98% from 159% as the bank moves closer to full privatisation.

Car parts and bike peddler Halfords pedalled on the right path towards its full year targets during the first quarter, with a solid first quarter against tough comparatives thanks to premium bikes, children's car seats and dashboard-cameras.

Investment group Charles Stanley has completed the sale of its broking division to Panmure Gordon for an undisclosed amount.

Mining giant BHP Billiton expects to take a $28bn pre-tax writedown on its US onshore oil and gas business.

Burberry's retail sales grew 8% in the first quarter of the year, down from 14% growth in the last full year, as the fashion house suffered a decline from the Asia Pacific region and further deceleration into the double-digits in Hong Kong.

Water company Severn Trent said there has been no material change to the business since it last reported on 22 May, but added that it expects its interest charge for the full year to be lower year-on-year.

A note on the media and internet sector from Morgan Stanley weighed on Pearson shares on Tuesday, as the educational publisher was downgraded among a largely positive stance on its peers.

Explorer Dragon Oil said production exceeded expectations in its latest six month update.

Shares in defence and aerospace engineer Meggitt rose on Tuesday following a report in the Financial Times that a merger with Cobham might be on the cards.

Sir Howard Davies has joined the board of Royal Bank of Scotland with immediate effect and will assume chairmanship of the majority state-owned bank in a matter of months.

In a bullish half-year statement, Carillion said, despite a slip in the size of its order book due to the UK election, it generated a significant increase in revenue and expected to hit its full year profit and earnings forecasts.

Polymetal International said gold production in the second quarter matched last year but was up on the quarter, and that it remains on track to meet its annual production guidance of 135m ounces of gold equivalent in 2015.

Recruitment company Michael Page reported growth in gross profit in an interim update, but said currency headwinds are dragging down results.

Economic news

In his strongest indication yet on the timing of a possible rate hike, Bank of England governor Mark Carney said on Thursday that the decision to raise rates will come into sharper focus around the end of this year.

Martin Wheatley will stand down as chief executive of the Financial Conduct Authority with effect from 12 September.
Fresh data has revealed UK pensioners withdrew more than £18bn in the first two months of new freedoms for private pensions, implying individual annuity sales have fallen less than feared.

The UK government was set to publish tougher rules on Wednesday to make it harder for strikers to disrupt key public services, in a move that was likely to inflame trade unions.

Unemployment in the UK rose by more than expected in May even as wage growth picked up further, albeit by less than economists had forecast.

Britain’s banks are facing £40bn in additional taxes over a decade, the BBA said on Wednesday, adding that the sector is being “singled out” by Chancellor George Osborne’s latest budget.

International events

Lawmakers in Germany backed a motion to start negotiations with Greece for a third bail-out package by a majority of 439 to 119.

Debt-relief for Greece so its economy can recover fully does not have to mean writing it off completely, the Director of the world’s financial watch dog believes.

European Central Bank (ECB) President Mario Draghi on Wednesday said he was confident Greece would repay its debt to the monetary authority and was acting under the assumption that Greece would remain in the euro.

The North Atlantic Treaty Organization (NATO) and its allies will launch its biggest military exercise since 2002 in October to counter Islamic State (IS) militants in Southern Europe.

It might be best if Greece ‘temporarily’ freed itself from the constraints of the single currency area, German finance minister Wolfgang Schaeuble seemed to suggest on Thursday.

The Greek parliament on Wednesday night approved the austerity measures demanded by the country's international creditors in exchange for a €86bn bailout package to keep the Hellenic nation in the Eurozone.

The Canadian central bank unexpectedly cut its main policy rate on Wednesday, possibly egged on by Tuesday’s agreement between Iran and the P5+1 nations on the latter’s atomic programme.

An increase in short-term interest rates is likely at some point this year, the chair of the Federal Reserve bank Janet Yellen was set to tell congressmen on Wednesday afternoon, according to prepared remarks released before her testimony.

Economic stimulus propped up economic activity in the People’s Republic of China in the second quarter, with the financial sector expected to have made a sizeable contribution as activity in the country’s stockmarkets soared.