UK markets were relatively tame on Thursday, following two previous days of range-bound trading activity. The main indices in France, Germany and Spain also showed little movement.
“European markets continue to struggle to know whether to be positive or negative and have subsequently found themselves range-bound, waiting to see how long Spain can hang on before asking for a bailout,” said Alastair McCaig, a market analyst at IG.
The FTSE 100 index added two points, closing at 5,828. The FTSE 250 index experienced a more significant move higher, rising by 82 points, or 0.7%, to close at 11,954.
Halfords Group and Tesco
One of the mid-cap companies that helped boost the FTSE 250 index was Halfords Group (HFD). The company’s shares rallied by 14% after reporting its latest trading results.
“Halfords, the leading retailer of bicycles in the UK, saw like-for-like sales jump 14.7% in the last quarter,” said McCaig. “Annual profit targets have now been revised up, from £35.8 million to £40-42 million. New CEO Matt Davies, who had previously run Pets At Home, was also unveiled.”
The company also said the recent success of the Olympics and Tour de France helped boost sales in its cycling division.
On the FTSE 100, shares in 
Tesco (TSCO) dropped by another 3% as investors expressed disappointment with yesterday’s first-quarter sales results. The company had reported negative like-for-like sales in its domestic UK market, which accounts for more than two thirds of its revenue and operating profits. Meanwhile, Morningstar analyst Michael Keara points out that dividend-seekers may find Tesco to be a compelling investment choice because ”Tesco's dividend yield is now near 5%, which is far above any high grade government or corporate bond, and we see extremely low risk to the dividend.”
On the economic front, the Bank of England decided to leave its monetary policy stance unchanged.
"While the political noise surrounding the lack of growth in the UK economy remains deafening, as widely anticipated, the Bank of England made no change to its policy stance at the latest meeting of the Monetary Policy Committee today," said Peter Hensman, a global strategist at Newton Investment Management.
"With the underlying state of the economy clouded by the poor summer weather, Jubilee celebrations and the Olympics and event risk in the eurozone building over the next month, a further pause in MPC policy seemed inevitable," he said. "However, expectations for a further round of quantitative easing (QE) are likely to build if existing uncertainties and weaker economic data remain."
