Britain's FTSE rises but lags euro zone peers after Greek vote

Britain’s top share index edged higher on Thursday as investors digested mixed earnings updates, but it lagged its continental peers after Greece approved a stringent bailout package to keep the struggling economy in the euro.

The FTSE 100 index was up 0.6 per cent at 6,796.06 by 1307 GMT, lagging a 2 per cent rise for the Euro Stoxx 50 , with peripheral euro zone markets benefitting from a drop in yields after the dramatic vote in the Greek parliament.

Also in focus were comments from Federal Reserve Chair Janet Yellen, who said on Wednesday the US central bank remains on track to raise interest rates this year.

Her comments sent the dollar higher, improving the prospects for US-facing companies such as Pearson, Intercontinental and Wolseley, which rose between 1.4 and 2.3 per cent.

“There seems to be an American theme on the leaderboard today,” said Richard Hunter, head of equities at Hargreaves Lansdown.

Among other gainers, Rio Tinto added 1.5 per cent after posting a sharp rise in second quarter iron ore output from a year ago, even as selling prices deteriorate and bad weather disrupted operations.

Dixons Carphone climbed 1.1 per cent after beating forecasts with a 21 per cent rise in yearly profit.

The electrical goods and mobile phone retailer, which was formed in a merger last year, also said its integration was progressing well.

“In its first full year as a merged company, Dixon’s Carphone is emerging as a worthy challenger to Amazon,” Simon Johnstone, analyst at Kantar Retail, said in a note.

“With strong growth in both online and store based sales, consumers are identifying Dixon’s Carphone as the retailer that can and is bringing technology to life.”

On the downside, Britain’s biggest sporting goods retailer, Sports Direct, dropped 0.5 per cent. Although it posted a 21 per cent rise in profit, the company said it would cut its bonus scheme earnings target for 2016.

“The company has revised down targets for 2015/16 after failing to make acquisitions and the stock has slumped to the foot of the board as a result,” said Tony Cross, market analyst at Trustnet Direct.

BT also edged slightly lower after the British telecoms regulator said it might be made to spin off its networks unit, which wholesales capacity to rivals like Sky and TalkTalk, to boost competition in the broadband market.

Reuters