FTSE rebounds as Wall St steadies

A positive start to trading on Wall Street safeguarded gains on the London market today as investors cheered signs of a revival in deal activity.

The FTSE 100 Index added 34.3 points to 5193.2 in a welcome rebound after a tough previous week for stock markets worldwide.

The Dow Jones Industrial Average on Wall Street rose as much as 70 points soon after opening following a drop of 2.5% on Friday due to disappointment over the second quarter results posted by two of the country’s big banks.

Bank of America Merrill Lynch and Citigroup revealed that investment banking revenues dropped in the quarter, fuelling concerns about the performance of Barclays and other major banks with similar activities.

But better corporate earnings today boosted the US benchmark index, while UK stocks were also helped higher by news of a takeover approach worth £2.9 billion for industrial giant Tomkins and talks over a potential merger involving International Power and the overseas assets of France’s GDF Suez.

The developments meant the FTSE 100 Index shrugged off an earlier weak start triggered by fresh falls for UK banks and the beleaguered oil giant BP.

The results of European bank stress tests due to be announced at the end of this week also added to nerves, although Barclays later recovered to stand 5.3p higher at 290p and HSBC rose 9.2p to 630.8p.

Lloyds also bounced back from a weak start to stand 0.8p higher at 60.4p, while Royal Bank of Scotland added 0.5p to 44.3p.

This was after the body charged with managing the taxpayer-owned banking assets said it had hired leading investment banker Jim O’Neil to oversee the sale of stakes in Lloyds and Royal Bank of Scotland.

BP shares were down 5% at one stage after the discovery of seepage and possible methane gas near the site of its damaged well, which was capped for the first time since April on Thursday.

The stock later stood 15.1p down at 392.1p.

The biggest rise in the top flight came from International Power after it emerged that it had reopened talks over a potential combination with GDF Suez. Shares jumped 33.5p to 350.2p, a rise of 11%.

The other major deal news involved industrial firm Tomkins, which jumped 31% after it said it had received an approach worth 325p-per-share from a consortium comprising US private equity firm Onex Corporation and the Canada Pension Plan Investment Board. The UK firm – a former member of the FTSE 100 – said the due diligence process was at an advanced stage as shares rose 70.3p to 300.6p.

Elsewhere, chilled food firm Uniq plunged 29%, or 4.5p to 11p, after it revealed the Pensions Regulator had rejected its proposal to resolve a funding deficit.

More in this Section

Toyota and Honda in major recall over faulty air bagsToyota and Honda in major recall over faulty air bags

Dunnes Stores was premature in challenging Point Village square disputeDunnes Stores was premature in challenging Point Village square dispute

Donald Trump to warn UK against ‘discriminatory’ tax on tech giantsDonald Trump to warn UK against ‘discriminatory’ tax on tech giants

Study: Dublin Airport contributes €10bn to Irish economyStudy: Dublin Airport contributes €10bn to Irish economy


Lifestyle

Dr Sarah Miller is the CEO of Dublin’s Rediscovery Centre, the national centre for the Circular Economy in Ireland. She has a degree in Biotechnology and a PHD in Environmental Science in Waste Conversion Technologies.‘We have to give people positive messages’

When I was pregnant with Joan, I knew she was a girl. We didn’t find out the gender of the baby, but I just knew. Or else, I so badly wanted a girl, I convinced myself that is exactly what we were having.Mum's the Word: I have a confession: I never wanted sons. I wanted daughters

What is it about the teenage years that are so problematic for families? Why does the teenage soul rage against the machine of the adult world?Learning Points: It’s not about the phone, it’s about you and your teen

Judy Collins is 80, and still touring. As she gets ready to return to Ireland, she tells Ellie O’Byrne about the songs that have mattered most in her incredible 60-year career.The songs that matter most to Judy Collins from her 60-year career

More From The Irish Examiner