FTSE gains ground

The London market enjoyed its first positive session of the week today as banks and housebuilders clawed back some of the previous day's heavy losses.

The two sectors have taken the brunt of some hefty falls this week, but rallied as investors took advantage of cheaper stocks.

Sentiment was buoyed by strong early gains on Wall Street after US retail sales last month rose twice as much as analysts were expecting, helping the Footsie climb 67.2 points to 5790.5.

The better retail news from across the Atlantic was not enough to help some of the UK's high street operators, which were in the red thanks to updates from Argos owner Home Retail Group and Carphone Warehouse that failed to calm investor nerves.

In London, Halifax Bank of Scotland was the big winner as its share price climbed back above the 275p discounted offer price of its looming rights issue. The bank's shares dropped below the mark yesterday causing havoc in the market, but were 25p ahead today at 283p.

Royal Bank of Scotland was next best performer, gaining 16.75p to 229p, with Lloyds TSB followed close behind with a rise of 20.75p to 353.5p.

Embattled FTSE 250 housebuilder Barratt Developments was in slightly better shape after Panmure Gordon stockbrokers maintained a buy rating and said the recent slump in the company's shares defied logic. The stock, which has dived to a fraction of last year's value amid fears it will breach banking covenants, rose 5% or 3.75p to 76.25p.

Other under-pressure housebuilders were also on firmer ground, with Taylor Wimpey 8.5p ahead at 61p, Redrow 6.75p higher at 141p and Bovis Homes 31p better off at 348p. FTSE 100 Index rival Persimmon bucked the trend and lost 3.25p to 372.75p, and its recent falls will see the stock ejected from the top flight later this month.

Carphone led the Footsie fallers board, down 11% or 25.25p to 202.5p, after revealing broadband connections in April were hit by the housing market slowdown.

Home Retail Group was also punished for a 12% fall in sales at Homebase, even though trading at Argos was better than expected and the company stuck by profit forecasts. Shares dipped 8.75p to 215p, a fall of 4%.

B&Q owner Kingfisher was impacted by Home Retail's first quarter update, with shares down 4% or 5.3p at 118.9p. BSkyB was down 3.5p to 508.5p and BT Group dipped 1.75p to 210.25p following Carphone's broadband assessment.

Back in the FTSE 100, Vedanta Resources was upgraded to a buy by Goldman Sachs, helping shares up 48p to 2283p. Xstrata was one of its rivals also on firmer ground, adding 197p to 4232p.

The Footsie's four biggest risers were HBOS, up 25p to 283p, RBS, up 16.75p to 229p, Enterprise Inns which added 30.75p to 443p and Standard Chartered which closed 105p up at 1630p.

The four biggest fallers were Carphone Warehouse, down 25.25p to 202.5p, Kingfisher down 5.3p at 118.9p, Home Retail Group down 8.75p to 215p and Scottish and Southern Energy which closed 53p down at 1454p.

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