FTSE 100 close: Shares given banking boost
The FTSE 100 steadied the ship after dramatic falls last week, with miners and banks doing their best to spur the market.
Latest: Updates from the Square Mile
Trading was slow on Monday after investors took stock following the losses caused by worse-than-expected US jobs figures last week.
That news pulled the FTSE 100 below 5,000 on Friday and after a steady day when markets showed little direction, the blue chip index pulled up late afternoon to close 29.8 points higher at 5018.5.
David Morrison, market strategist at GFT Global, said: 'It's just a very dull Monday morning with everything a bit undecided after Wall Street fell on Friday. Investors are cautious with the start of the US corporate earnings season and the Bank of England and the ECB meetings later this week.'
On Wall Street, the Dow Jones Industrial Average was expected to open around 40 points higher today, but had a slow start. By noon, eastern time, it was up just over 70 points at 9,559 after Goldman Sachs raised its rating on large banks such as Wells Fargo and Bank of America.
UK banks were among the risers today after the CBI reported that 32% of financial firms increased their sales in the three months to September – the first time since 2007 that this figure has outstripped the number of firms reporting a fall.
Royal Bank of Scotland led the way, rising 1.92p, or 4.12%, to 48.45p. Lloyds Banking Group, 1.24p higher at 95.96p, and HSBC, 3.4p higher at 689.9p, followed suit. Barclays was also up: 5.05p higher at 361.8p.
It was reported yesterday that Barclays is set to enter into exclusive talks with insurer Standard Life to negotiate a £250m deal to purchase its banking division.
RSA Insurance added 4.31%, or 5.5p to 133.2p, after a newspaper report said the general insurer and MoreThan owner may scrap plans for a rights issue due to a lack of suitable bid targets.
Shares in Aviva fell 0.33% or 1.5p to 451.1p after it confirmed plans to sell a minority stake in Dutch subsidiary Delta Lloyd.
Miners were supported by slightly firmer copper prices thanks to an easier dollar, and by some positive broker comment.
Eurasian Natural Resources rose 4.71%, or 38p, to 844p, with Kazakhmys 15½p better off at 1,002p. Antofagasta, 26½p higher at 746½p, Rio Tinto, up 58½p at 2,564p, Vedanta 35p better at 1,912p, and Xstrata, 21½p higher at 875p, all gaining.
Oil majors were the major drag on blue chip sentiment as crude prices fell back below $70, with BP, 0.1p lower at 535.2p, Royal Dutch Shell, 4p lower at 1,746p, all shedding - bar BG Group, up 4p at 1,060p.
Brent crude oil stood at $67.40 today.
Tomorrow's agenda
Tesco last week reacted angrily to the Competition Commission's plea that shops which already have a 60% market share within a local area should be banned from opening a new store or increasing floor space at the existing one. Tomorrow Britain's biggest supermarket could say more on the idea when it reveals half-year trading. Analysts predict profit will be up around 13% to £1.55bn.
Investors will also want to discover whether the retailer's spending on Royal Bank of Scotland's share of the Tesco Personal Finance, and its Korean shopping trip - when it spent nearly £1bon on beefing up its hypermarket presence there - will drag the group down.
The supermarkets pushed down profit at Northern Foods, the maker of Goodfella's pizzas and Fox's biscuits, when they demanded better terms from suppliers. Tomorrow the latest impact of that squeeze will become clear when Northern Foods issues its half-year trading update. Analysts at evolution downgraded the stock to neutral since they expect growth to slow. 'The market is likely to punish any perceived slowdown however small,' the broker said.
Shares in contractor Mouchel Group rose 20% in September after speculation it was a takeover target for Balfour Beatty. Investors will want to discover more about future plans when it posts preliminary results.
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