FTSE close: Banks on the up; Severn heaven

By Ed Monk for Thisismoney.co.uk
Updated: 12:20 EDT, 27 May 2011

The world's leading nations gave a confidence boost to markets today after declaring the global economic recovery was becoming "self-sustained".

Friday feeling: Shares head into the weekend on the up.

While G8 leaders warned over the high cost of commodities, the overall upbeat message ensured markets were able to shrug off recent disappointing economic data in the United States and enter the holiday weekend in positive mood.

Strong performances from the mining and banking sectors, including from Britain's taxpayer-owned banks, also helped as the FTSE 100 Index closed 57.9 points higher at 5938.9, a rise of 1%.

It was a much-needed rally after fresh fears over Europe's sovereign debt crisis caused the top flight to slump by more than 100 points on Monday.

The dollar dropped against the pound as a report on consumer spending added to concerns about the US economic recovery following disappointing unemployment and growth numbers on Thursday. Sterling stood at 1.64 against the greenback but retreated versus the euro at 1.15.

The UK's banks were boosted by an upbeat note from Societe Generale, which said the risks facing the sector were receding faster than current market expectations. It also noted that the global economic crisis had given banks the opportunity to boost their pricing power.

Lloyds Banking Group and Royal Bank of Scotland were among the top risers in the blue chip index, up 1.4p to 52.8p and 1.4p to 42.2p respectively. Barclays added 3.95p to 275.25p.

Fashion house Burberry was another notable riser, up 30p to 1290p, as investors returned to the stock after Thursday's post-results sell-off.

The heavyweight mining and energy sectors were also responsible for pulling the market higher, after volatile oil and metal prices strengthened as the dollar weakened.

Essar Energy was the top riser, up 22.6p to 451.3p, or 5%, after a note from Deutsche Bank that claimed its oil business is undervalued.

Silver and gold producer Fresnillo was up 29p to 1410p, South American copper miner Antofagasta rose 54p to 1312p, and platinum producer Lonmin was ahead 38p at 1572p.

In today's corporate updates, Severn Trent shares were 15p higher at 1517p after higher levels of water consumption helped the regulated company to offset pressure on bills from industry watchdog Ofwat.

Full-year profits fell 15% to £288.6m but Severn said it remained on track to outperform on its regulated targets between 2010 and 2015.

Outside the top flight, Robinsons and Tango maker Britvic said sales growth had accelerated in its second quarter despite continued pressure on its performance in pubs and bars.

It also said it hoped recent price rises would help it claw back some of the margin it has surrendered as a result of rising input costs. Shares were up 6.9p to 432.9p.

The biggest FTSE 100 risers were Essar Energy up 22.6p at 451.3p, Antofagasta ahead 54p at 1312p, Vedanta Resources up 77p at 2169p and Royal Bank of Scotland ahead 1.4p at 42.2p.

The biggest fallers were BSkyB down 3.5p at 834.5p, BP off 1.55p at 459.65p, Imperial Tobacco down 5p at 2170p and Reckitt Benckiser off 7p at 3392p.

14.40: As we head towards the weekend, the FTSE 100 is holding onto gains from today and looks like it will recover a generally poor week.

The Footsie is 49.18 points higher at 5930.1 today, having started the week at 5948. It dipped to 5810 at one stage on Wednesday.

Over on Wall Street, the Dow Jones has opened higher and is now 51.8 points up at 12,454.56.

13.05:

Taxpayer-backed banks Lloyds Banking Group and Royal Bank of Scotland are among the top risers today.

Loyds and RBS are up 1.5p to 52.8p and 1p to 41.9p respectively. Barclays have added 4.7p to 276p.

It has helped the Footasie hang onto gains from this morning and the index is currently 47.42 points higher at 5928.41.

The heavyweight mining and energy sectors were also responsible for pulling the market higher, af.ter volatile oil and metal prices strengthened as the dollar weakened.

Essar Energy was the top riser, up 20.9p to 449.6p, or nearly 5%, after a note from Deutsche Bank that claimed its oil business is undervalued.

Silver and gold producer Fresnillo was up 29p to 1410p, South American copper miner Antofagasta rose 26p to 1284p, and platinum producer Lonmin was ahead 32p at 1566p.

There are results today from Severn Trent and Tate & lyle.

11.10:

We have more on Severn Trent, which has blamed last December's freezing weather for causing a rush of burst pipes and making it miss its annual leakage target.

Its shares are up 24p at 1,5260p.

New FTSE 100 entrant Glencore is still lagging its launch price of 530p - it's 1.4p higher at 522.9p today.

The commodities giant made its entrance on the Hong Kong market overnight. The stock fell 1.9% in what David Buik of BGC Partners dubbed 'an inauspicious debut'.

The FTSE 100 is up 49.8 points at 5,930.8.

Brent crude is trading at just over $114 a barrel. Gold was fixed this morning at $1,525 an ounce compared with $1,518.50 at the previous close.

09.50:

The FTSE 100 made gains today with banks gaining after a positive broker note, while Severn Trent was up after profits beat targets.

An upbeat note on the banking sector from Societe Generale ensured investors headed for the bank holiday weekend in upbeat mood today.

By 9.50 the Footsie was 61.2 points higher at 5942.21.

A positive finish to trading in New York, despite the release of disappointing figures on unemployment and the pace of economic output, also bolstered spirits.

Lloyds Banking Group was among the highest risers in the FTSE 100 Index, up 1.1p to 52.5p, after SocGen said that the risks facing the sector were receding faster than most commentators think.

It also noted that the global economic crisis had given banks the opportunity to boost their pricing power.

Royal Bank of Scotland, which is the broker's preferred stock in the sector, rose 0.6p to 41.5p, while Barclays added 4.4p to 275.75p.

Fashion house Burberry was another notable riser, up 29.5p to 1289.5p, as investors returned to the stock after yesterday's post-results sell-off.

In today's corporate updates, Severn Trent shares were 9p higher at 1511p after higher levels of water consumption helped the regulated company to offset pressure on bills from industry watchdog Ofwat.

Full-year profits fell 15% to £288.6m but Severn said it remained on track to outperform on its regulated targets between 2010 and 2015.