Banking stocks were out of favour today amid market worries over tough new capital requirements.
The sector accounted for three of the FTSE 100 Index’s top four fallers after the Basel Committee on financial supervision signalled that extra capital should be put aside to prevent another crisis.
A better day for mining firms helped the blue-chip add 21.6 points to 5234.2 by lunchtime, although the Footsie fell away from session highs in a nervous end to the week.
Lloyds Banking Group led the fallers for a second day after its 8% slide on Wednesday and lost another 2% or 1.13p to 49.97p.
Calls for increased capital from regulators threaten to hit profits and dividends across the sector, causing Barclays to fall 5p to 268.85p and Royal Bank of Scotland to drop by 0.73p to 30p.
Among the blue-chip backing stocks, HSBC was alone in positive territory, adding 2.5p to 686.6p after agreeing a £135m (€152.3m) deal to sell its insurance broking business.
The commodities sector recovered from losses yesterday as Antofagasta climbed 19p to 924p and Kazakhmys lifted 26p to 1271p. Oil giant BP was 6.2p higher at 580.5p.
In a quiet session for corporate news, temporary power specialist Aggreko topped the FTSE 250 Index risers board after reporting better than expected trading for the fourth quarter. Shares were more than 5% or 47p higher at 881p after the company also forecast further progress next year.
Meanwhile, Ryanair’s decision to pull out of the acquisition of up to 200 planes from Boeing was well received by investors. Shares were almost 6% higher - up 17c to €3.27 – as the airline said it would return cash to shareholders instead.
Rival easyJet was also higher, despite the disruption caused by bad weather closures at several UK airports. Shares were 10p higher at 351.4p.
Another second tier riser was car dealership Inchcape, 0.83p ahead at 29.18p after brokers at Cazenove picked it out as undervalued.
The FTSE 100’s top riser, medical instruments firm Smith & Nephew also benefited from a broker push as UBS lifted its target price. The firm cheered 16p to 630p or 3%.
Elsewhere Topps Tiles shares were 4% higher after the floor coverings firm jettisoned its Dutch business and said trading continued to improve in the UK. Shares were 3.75p higher at 84.5p, even though Topps expects a £1m (€1.13m) write-off from the closure of the Dutch operation.