FTSE 100 ends Q3 on a high

September’s been a month of two halves. Losing around 250 points in the space of a fortnight was not a great start, but, as we’ve seen all summer, buyers are never far away, even with the very real possibility of nuclear Armageddon.

Up from a five-month low mid-month, the FTSE 100 (UKX) currently sits at a two-week high. After trading sideways in a narrow range for much of the week, it’s kicked into life Friday, putting the index on track to deliver a small profit for the third-quarter – it ended Q2 at 7,312.

Activity Friday centres around weaker-than-expected UK second-quarter growth. Latest estimate from the Office for National Statistics (ONS) has annual growth during the period at 1.5%. Last guess was 1.7%. That’s the slowest annual pace since 2013 and gave rate hawks food for thought.

Odds of a rate hike as early as November remain pretty short still, although that may change on any further signs that the economy is slowing faster than feared amid concerns around Brexit and a pinch on the UK consumer.

These growth fears, plus Bank of England governor Mark Carney again raising the prospect of an imminent rate rise, had sterling all over the place, although early weakness did the FTSE 100’s army of overseas earners a favour, chasing the blue-chip index up to a day’s best of 7,378.

Bargain hunters have been piling into education firm Pearson (PSON). It’s been a basket case for ages, as it sold the Financial Times just as Americans began buying less of its US education products. Enough traders think the worm may have turned to get the share price up 6% this week.

We’ll get more news in a third-quarter trading update on 17 October. Broker BNP Paribas now rates the shares ‘outperform’ and tips them up to 700p. A good entry point, it says.

We keep mentioning ITV (ITV) and, although there’s no official news from the broadcaster, investors like it’s modest rating and generous dividend yield amid talk fears about the UK TV advertising market are overdone.

Housebuilders are winners this week, too, with Taylor Wimpey (TW.), Persimmon (PSN), Berkeley Group (BKG) and Barratt Developments (BDEV) all rewarding shareholders with chunky gains.

They’re typically a bet on the UK economy and, as bond yields would track any increase in inflation and interest rates – UK 10-year gilts already yield the most since February – company pension funds would require less new money.

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

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