FTSE edges higher in morning trading

Market heavyweight HSBC set the pace for banking stocks today after posting better-than-expected half-year results.

With the banking sector ahead by 1% and oil major Royal Dutch Shell also strong, the FTSE 100 Index stood 11.8 points higher at 5294.1 by mid-morning.

HSBC – the first of the big four banks to report half-year results this week - saw its shares move 11.25p higher at 934.5p after bucking City expectations of a fall in interim figures.

The results instead showed a 5% improvement in profits and helped a clutch of rivals to make progress.

Even though HSBC warned of higher bad debt levels in the UK, Barclays rose 5p to 562p, Royal Bank of Scotland lifted 11p to 1705p and Halifax Bank of Scotland cheered 2p to 866.5p. All are due to update the market this week.

The latest rise in the oil price – above $61 – ignited Royal Dutch Shell shares, with the company’s B stock – the most commonly held in the UK – up 22p to 1828p. BP failed to follow Shell’s lead and remained unchanged at 629.5p.

The main downward force was provided by mining stocks following declines of 13.5p to 793p for BHP Billiton and a drop of 20p to 1190p for Xstrata.

Outside the top flight, motor dealer Inchcape rose 69p to 2092p after a 21.6% rise in pre-tax profits to beat market forecasts.

High street retailer Woolworths rose half a penny to 37p after agreeing the sale of its loss-making music and video chain MVC.