FTSE close: Barclays, HSBC down; British Land up

By Adrian Lowery
Updated: 12:31 EDT, 8 September 2010

Close: 17.00

The London market closed up today with a late reverse after a day spent in the doldrums thanks to banks and miners. The FTSE 100 index at the close was up 21.92 points at 5429.74.

The FTSE 100 Index resumed its winning run today after gains on Wall Street helped steady nerves in the City.

Fresh worries over Europe's sovereign debt crisis had threatened to put the brakes on the recent progress seen on both sides of the Atlantic.

However, an improved start to trading in America helped the FTSE 100 Index to recover Tuesday's lost ground as it closed 21.9 points higher at 5429.7. The news that Portugal managed to raise one billion euros in a debt auction on Wednesday that drew strong investor interest helped ease some of the concerns.

As well as London's decent shares performance, the pound strengthened against the dollar and euro after the latest manufacturing output figures offered a picture of a sector just about holding its own in uncertain conditions.

Sterling rose nearly 1% to 1.55 dollars and 1.22 euros. Despite the wider market recovery, banks continued to struggle as investors remained cautious in the wake of a report that suggested Europe's major players held more risky government debt than thought during recent stress tests.

Amid a dramatic week for the sector, Barclays dropped 2% or 6p to 308p as Bob Diamond's promotion to replace John Varley as chief executive continued to draw an uncertain reaction from investors.

HSBC, which is due to lose Stephen Green as executive chairman later this year, fell 7.6p to 654.8p, while Royal Bank of Scotland was off 0.3p to 45.8p.

A fall in commodity prices, including the benchmark price of crude oil, put pressure on a number of commodity-based stocks. Among them, Vedanta Resources fell 8p to 1972p and BHP Billiton eased 2.5p to 1890p.

On the risers board, chip designer Arm Holdings jumped 6% after broker UBS issued a downbeat assessment of the European semiconductor market, but made an exception for the Cambridge-based firm as it raised its price target. Shares were 21.4p higher at 387.7p.

It was followed on the way up by oil giant BP as shares overcame the fall in crude prices to post a 5.35p improvement to 412.15p. This came after ratings agency Fitch upgraded BP's debt from its lowest investment grade BBB, up to A.

Fitch said the upgrade "primarily reflects an end to the threat of further leaks from the Macondo well in the Gulf of Mexico".

BP also released a report into the spill in which it said a series of complex events, rather than a single mistake or failure, led to the tragedy.

Elsewhere on the fallers board, engineering firm Invensys lost some of the froth in its shares as takeover speculation started to fade. The stock bounced 7% yesterday on bid rumours, but was down 2.3p or 1% to 266.9p today.

ABB, Emerson Electric and General Electric have all been mentioned as possible bidders for the UK engineering firm.

The biggest Footsie risers were Arm Holdings up 21.4p at 387.7p, Icap ahead 14.7p at 434.1p, Inmarsat up 22.5p at 712p and Admiral Group ahead 49p at 1620p.

The biggest fallers were Barclays down 6p at 308p, Diageo off 20p at 1085p, Rexam down 5.2p at 308.3p and Petrofac off 17p at 1388p. ends

15.15

Wall Street's Dow Jones is up 70.6 points to 10,411 in early trading after losses yesterday. The Nasdaq is ahead 0.4%.

The improved start to trading in America helped the FTSE 100 recover lost ground, as it edges forward 21 points to 5,429.

BP shares hurdled the fall in crude prices to post a 6.8p improvement to 413.8p. This came after ratings agency Fitch upgraded BP's debt from its lowest investment grade BBB, up to A.

Fitch said the upgrade 'primarily reflects an end to the threat of further leaks from the Macondo well in the Gulf of Mexico'.

The announcement came as BP released a report into the spill in which it said a series of complex events, rather than a single mistake or failure, led to the tragedy.

Among mining stocks, African Barrick Gold is up 11.5p to 610.5p, as gold prices rose towards record highs in Europe.

12.15

Hopes for a better start to Wall Street trading are helping the Footsie recover lost ground, despite more pressure on banks and miners.

The blue-chip share index dropped by more than 40 points in early trading but has rallied to stand 3.3 points lower at 5,404.5.

Traders were encouraged by signs that US shares will pull out of the slump which yesterday saw the S&P 500 and Dow Jones lose 1%.

Those falls were triggered by concerns that European banks may have more risky government debt than thought during recent stress tests. While worries have started to fade, attention has switched to the US Federal Reserve's Beige Book, which some analysts fear will present a less than optimistic assessment of economic prospects.

In London, engineering firm Invensys is on the fallers board as some of the froth in its shares following takeover speculation starts to fade.

The stock bounced 7% yesterday on bid rumours but is down 4p or 1.5% to 265.2p today.

ABB, Emerson Electric and General Electric have all been mentioned as possible bidders for the UK engineering firm.

10.15

The London market saw further falls today as weak banks and miners overshadowed upgrades for property firms.

Overall, the FTSE 100 index slid 42.6 points to 5365.1 after dropping by a similar amount yesterday. Most Asian stock markets finished lower due to pressure caused by the yen hitting a fresh 15-year high.

'This week is one which is devoid primarily of data. Markets aren't going to do very much I don't think,' Peter Dixon, UK economist at Commerzbank, said. 'Unless there's any real news driving (the market), it's just one of those times when investors probably take a little bit of profit.'

Banks took the most points off the index after the Wall Street Journal yesterday reported major lenders had understated holdings in potentially risky government debt during tests designed to probe banks' strength.

Barclays fell 4% - 11.1p to 302.9p - as Bob Diamond's promotion to replace John Varley as chief executive continued to draw an uncertain reaction from investors.

HSBC, which is due to lose Stephen Green as executive chairman later this year, fell 10.1p to 652.3p, while Royal Bank of Scotland was off 0.6p to 45.5p.

Other fallers included Eurasian Natural Resources, which dropped 17.5p to 838.5p, and Vedanta Resources with a fall of 34p to 1946p.

BP shares were 2.5p higher at 409.3p as it prepared to release the report of its investigation into the causes of the Gulf of Mexico oil disaster.

Property firms were among the top blue-chip risers after Barclays Capital issued a positive sector outlook and mortgage lender Halifax posted a surprise uptick in August house prices.

British Land was 3.2p up at 478p and Land Securities rose 4.5p to 646p, while Hammerson gained 3p to 377.2p.