Angus Rigby, chief executive officer of TD Waterhouse, reflects on retail trading activity in July

While June was defined by traders on the lookout for discounted buying opportunities, July was all about guessing the peak and taking profits.

Retail trading in July must be seen in the context of rallying markets. The FTSE index rose from 4,249.21 on 30 June to 4,631.61 on 30 July, while the S&P 500 index rose from 914.32 to 993.32 over the same period.

July was characterised as a month of two halves, with strong buying activity in the first two weeks, followed by a wave of selling as customers pitted nerves against careful investment strategies. On the whole, buys and sells in July were level pegging, with sells only slightly (3 per cent) ahead of buys at the end of the month.

As for the sectors of choice, trades in oil and mining stocks figured heavily, including activity in Nighthawk Energy, a UK-registered energy company and a relative newcomer to our most popular trades tables.  They were accompanied by Rio Tinto, which had decided to sell its US food packaging division of aluminium subsidiary Alcan to Bemis in a $1.2 billion deal in the latest move to reduce its $38.7 billion debt pile.

Aviva also gained our customers’ interest as a potential buying opportunity. The UK’s largest insurer, which had made a point of holding its dividend when it reported full-year results in March, saw its share price fall in July following concerns that not cutting the payout could leave its capital position weakened. The insurance giant expects to boost its capital surplus by £400 million and leave shareholders around 16 times better off compared with net earnings in 2008, following the recent sale of Australian business to National Australia Bank (NAB) in a £452 million deal.

However, July was really all about the UK’s banking sector, with Lloyds, RBS and Barclays all maintaining their stronghold of the top three positions in both tables – accounting for 59.4 per cent of the top ten trades at a ratio of one bank buy for every bank sell. But it was Lloyds that established itself as the most popular trade in July accounting for 43 per cent of the top ten bank trades.