Jittery FTSE shows slight rise

A nervous London market clung on to gains today ahead of an expected agreement on the stalled $700bn (€482bn) banking rescue in the US.

Hopes of a revamped deal being passed helped banks move forward, while heavyweight mining stocks rose amid hectic merger and acquisition activity.

By mid-morning the FTSE 100 Index was 27.4 points up at 4929.8 – although indications of a lower opening on Wall Street muted gains made earlier on buoyant Asian markets and a 4.7% rise for the Dow Jones Industrial Average.

Much of the market’s focus was on Halifax Bank of Scotland after recent falls cast doubt over the terms of its rescue takeover by Lloyds TSB.

But the stock – which fell 14% yesterday – climbed to the top of the Footsie leader board with a rise of almost 8% or 9.5p to 131.9p. Lloyds followed close behind, up 18.75p to 245.25p.

Elsewhere Barclays also picked up 20.75p to 347.25p or 6%, although Royal Bank of Scotland was nursing a 11.1p fall to 167.9p.

Mining stocks were also higher, with investors welcoming Xstrata’s decision to axe its £5 billion bid for rival Lonmin due to turmoil in global credit markets.

Xstrata gained 107p to 1823p although the move sent Lonmin plunging 20% or 446p to 1828 – the leading Footsie faller.

Elsewhere Rio Tinto added 204p to 3675p after Australian competition authorities said they had no objections to a takeover by BHP Billiton, 41p better at 1300p.

Outside the top flight, Domino’s Pizza dipped 4.25p to 193p despite a rise in third quarter sales.

Online fashion retailer ASOS was another faller despite stellar sales figures as analysts said worsening economic conditions could eventually rein in its rapid growth. Shares were off 10.25p to 340.5p, or 3%.

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