Banking group Barclays led a rally for London’s financial stocks today as investors cast aside last month’s credit concerns.
The FTSE 100 Index closed up 11.9 points at 6315.2, as better-than-expected manufacturing figures helped reassure investors on the strength of the UK economy.
Barclays was the top Footsie riser, up 4%, or 24.5p at 638p after comments from top bosses at the weekend that the group was not facing a liquidity crisis helped put the stock back on track.
The banking giant had suffered after revealing it tapped into the Bank of England’s emergency fund and it was also hit by concerns over its exposure to US sub-prime mortgages.
The bank’s revival helped the wider sector make headway with little in the way of corporate news and a lack of direction from the US, which is on public holiday for Labor Day celebrations.
Other financial stocks making advances included investment group Schroders, up 22p at 1346p, and Royal Bank of Scotland, ahead 5.5p at 580p as the sale of its Southern Water utility business gathered pace.
Life and pensions firm Standard Life rose 3.75p to 304p, ahead of what are expected to be healthy interim results tomorrow, with fellow insurer Royal and Sun Alliance climbing almost 2%, or 2.6p to 144.1p.
Mining stocks powered ahead, with Kazakhmys leading the pack with a 30p lift to 1299p, also ahead of its interim results on Tuesday. Elsewhere in the sector, Xstrata was up 48p at 2953p and Lonmin cheered 40p at 3151p.
British Energy was another strong riser on more weekend reports that the Government could sell its remaining 39% stake in the business. Although played down by analysts, the energy firm ticked up 4.75p to 468.25p on the possibility.
But other players in the energy sector were on the back foot amid flat oil prices and news that China was planning a major expansion of its refineries to reduce reliance on imports. Oil major BP was down 7p at 550.5p, while BG Group was off 12.5p at 781.5p.
Broadcaster BSkyB also slipped back 3.5p to 672p as broadband rival BT pushed customer numbers past four million. BT closed the day 0.25p ahead at 316p.
Elsewhere TUI Travel – created from the merger of First Choice and Germany’s TUI – failed to see strong gains on its IPO. The stock stood at 285.5p, down 16.5p from its 302p offer price.
In the FTSE 250, music and books chain HMV gained almost 8%, or 9.5p, to 132.75p on a upgrade ahead of a trading update later this week.
Analysts at Deutsche Bank think the market is underestimating the group’s turnaround plans amid increasing competition from internet downloads.
The biggest Footsie risers were Barclays up 24.5p at 638p, ICAP ahead 13p at 501p, Kazakhmys up 30p at 1299p and Royal & Sun Alliance up 2.6p at 144.1p.
The biggest Footsie fallers were Rentokil Initial down 3.6p at 169.6p, BHP Billiton off 29p at 1430p, BG Group down 12.5p at 781.5p and BP off 7p at 550.5p.