Barclays leads FTSE into the black

Barclays led London shares into the black today after saying it was set to buy a controlling stake in South African bank Absa.

The banking group, which also went ex-dividend, moved more than 2% or 13p higher to 533p, helping the FTSE 100 Index lift 0.2 points to 4568.5 by mid-morning.

Barclays, which said yesterday it was in talks with Absa, was the top performer in an otherwise mixed session for banking stocks.

The next best showings came from Royal Bank of Scotland, ahead 1% or 16p to 1612p, Lloyds TSB progressing a penny to 428.75p and Northern Rock putting on 4p to 729.5p.

But the rest of the sector was unchanged or down, with the biggest loser being HSBC, retreating 4p to 880p.

The London market got off to a poor start after higher oil prices and concerns about the US economy sparked a slip of more than 70 points in the Dow Jones Industrial Average last night.

The price of a barrel of US light crude touched $49, sparking fresh concerns in New York about consumer spending and company profits.

The release of weak economic data in the United States further dampened sentiment towards equities.

Back in London, confectionery group Cadbury Schweppes was third in the Footsie fallers, down 6.25p to 428.75p, after reiterating full year profits expectations at the lower end of hopes following a difficult summer for its continental European soft drinks business.

In the FTSE 250 Index, business telecoms group Thus was the biggest faller, losing 4.75p to 12.25p, after saying first half earnings would fall short of last year in the face of tougher trading conditions.

Top flight telecoms group Cable & Wireless suffered from the news, topping the Footsie fallers with a 3.25p drop to 99.5p.