Lloyds TSB shares rise 1%

Lloyds TSB shares rose 1% today as investors took a punt on renewed speculation about a bid for the UK’s fifth largest banking group.

The latest market rumours suggested Bank of America could be a possible suitor, lifting Lloyds by 4p to 526p at mid-morning.

The rest of the banking sector took the news in its stride, as the FTSE 100 Index struggled for direction to stand 12.5 points lower 5902.7. It had been 24 points higher, but has suffered from the lack of major corporate news.

Housebuilding giant Persimmon offered some guidance on the property market after announcing a 16% rise in half-year profits and adding that it had not seen any impact from this month’s rate rise by the Bank of England.

Shares in the blue-chip company were up 16p at one point, but later stood 7p lower at 1269p.

The about-turn was matched by a number of second-tier rivals, with only Taylor Woodrow and George Wimpey holding on to gains – up 2.5p and 2.75p to 344.5p and 486.5p respectively.

Miners continued their recent progress, with Antofagasta up 5.25p at 441p and BHP Billiton ahead by a penny at 1051p.

The other top-flight company to report results today – InterContinental Hotels - failed to win over shareholders despite a 30% rise in half-year operating profits. Shares were down 10.5p to 893.5p, amid disappointment at the absence of further details about forthcoming share buy-backs.

In the second-tier, Matalan shares rose 1%, or 1.75p at 174p, after it emerged founder John Hargreaves was working on a possible 200p a share offer for the company. He has also been given an extra month to table his offer.

However, engineering group Bodycote International fell 5% in the wake of interim results. While the figures were in line with expectations, one broker took the opportunity to cut its rating on the stock, which fell 11.5p to 237p.