Fundraising lifts FTSE shares

A £4.5bn fundraising move from Barclays lifted bank shares to drive the London market forward today.

The sector littered the risers’ board as investors welcomed Barclays’ efforts to strengthen its finances, sending its shares more than 6% higher.

The FTSE 100 Index eventually closed 31.4 points ahead at 5666.1 after a better session for retailers, while travel firms were given a late boost by falling oil prices.

US markets also enjoyed a positive start but all eyes were on the US Federal Reserve’s announcement on interest rates later today. The Fed was expected to hold rates at 2%.

In London, Barclays gained 20.25p to 331p after unveiling a raft of wealthy overseas investors ready to take big stakes in the bank, including the Qatar Investment Authority and Sumitomo Mitsui Banking Corporation.

Fellow-fundraiser Halifax Bank of Scotland, whose shareholders vote on the bank’s £4 billion rights issue tomorrow, added 17.25p to 292p, or 6%. This took it well clear of the 275p discounted rights price which it fell below yesterday.

Royal Bank of Scotland also improved 10p to 229.25p, while in the second tier Alliance & Leicester rose 7.75p to 323.25p after an upgrade from Morgan Stanley.

The leading riser however was London Stock Exchange, which surged more than 14%, or 117.5p to 952p on talk of stakebuilding by Qatari investors.

Bigger than expected oil and fuel stocks in the US meanwhile saw oil prices fall back to below 133 dollars, lifting British Airways 18p to 229p and cruise firm Carnival 91p to 1758p.

Retail stocks were also enjoying a rebound after some heavy selling yesterday in the wake of some gloomy market share data for the big supermarket chains.

CBI retail sales figures today showing a modest improvement in June also helped the sector, with Sainsbury’s and Tesco adding 13.25p to 328p and 15.9p to 381p respectively.

Next and Kingfisher were in better shape, with the fashion retailer adding 67.5p to 1027p and the B&Q owner up 6.6p to 119p. Marks & Spencer rose 17.5p to 350.25p despite a downgrade from Pali International.

United Utilities featured high among the fallers after the stock turned ex-dividend, denying buyers the right to the latest dividend payout. United was off 4%, or 31.5p at 690.5p.

It was also a poor session for miners with Xstrata off 167p to 3986p on market talk of a possible bid for Australian firm Aquarius Platinum.

Anglo American also fell 141p to 3285p after it said it was reviewing all the options regarding its Unki mining development in Zimbabwe in the light of the country’s current turmoil.

In the FTSE 250, transport firm Stagecoach was down more than 5%, or 14p to 264.5p, despite unveiling strong growth in its bus and train operations.

The biggest Footsie risers were London Stock Exchange up 117.5p at 952p, British Airways up 18p at 229p, Next ahead 67.5p at 1027p and Barclays up 20.25p at 331p.

The biggest Footsie fallers were Eurasian Natural Resources down 70p at 1342p, United Utilities down 31.5p at 690.5p, Anglo American off 141p at 3285p and Xstrata down 167p at 3986p.

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