FTSE bounces back

The FTSE 100 Index bounced back above the 5800 level today as it recovered more than half of yesterday's losses.

Vodafone shares showed signs of steadying after a grim start to the week which saw almost £5bn (€7.3bn) wiped off its stock market value.

And early gains on Wall Street along with support from oil stocks in London helped lift the Footsie 52.6 points higher to close the day at 5844.1.

But further gains were prevented by a number of banking stocks as Halifax and Bank of Scotland owner HBOS and a couple of rivals ensured sentiment remained fragile.

HBOS faded more than 4% after its house broker downgraded the stock and fuelled market disappointment that a 13% profits rise to £4.84bn (€7bn) failed to beat expectations - something that others have managed to do in recent weeks.

Shares fell 44.5p to 1017.5p, while Barclays eased 10.5p to 658p and Standard Chartered slipped 19p to 1471p.

Investors were more positive about Royal Bank of Scotland after the owner of NatWest hiked its annual dividend by 25% yesterday and promised to buy back up to £1bn (€1.46bn) of its own stock this year.

With analysts trumpeting the view that RBS was rated too cheaply compared to others in the sector, shares in the UK's second-largest bank lifted 25p to 1933p.

And Alliance & Leicester showed signs that its share price could recover after heavy losses this week. The stock lifted 16p to 1085p.

There was some much-needed life in Vodafone shares as analysts expressed hope that the recent fall by the mobile phone operator showed signs of bottoming out following a rise of 2.75p to 111.75p.

The stock has been under pressure since Monday, when chief executive Arun Sarin cautioned over revenues growth prospects and said the company was cutting the value of its assets by up to £28bn (€41bn).

Royal Dutch Shell added to the upward trend with gains of 44p to 1839p, while BP cheered 7.5p to 637.5p. The recovery in the oil sector, which follows a recent bad run, came amid ongoing concerns in Iran and Nigeria which could buoy the cost of crude on the global market.

Other strong risers included gases group BOC, which advanced 2% or 37p to 1547p on talk that German industrial giant Linde was preparing to make a new approach for the firm, possibly as soon as tomorrow.

Mining firm Xstrata led the Footsie risers board, up 92p to 1757p after it impressed with full-year results and raised confidence for the rest of the sector.

Elsewhere, Silk Cut maker Gallaher put early losses behind it to close a penny up at 885p.

And second-tier retailer Matalan offered a much-needed boost to investors as it showed signs of an improving trend for sales. Shares rose 3% or 6p to 189.25p.

The biggest blue chip risers were Xstrata up 92p to 1757p, WPP up 17.5p to 680p, Vodafone 2.75p higher at 111.75p and Royal Dutch Shell up 44p to 1839p.

The heaviest fallers were HBOS off 44.5p to 1017.5p, Barclays down 10.5p to 658p, Standard Chartered down 19p to 1471p and Next 18p weaker at 1632p.