Upbeat trading news from Lloyds TSB saw the bank make strong gains today but failed to provide direction on the wider London market.
Shares in the UK’s fifth largest bank gained more than 3% after the group reassured over losses from the US sub-prime mortgage crisis and said full year performance was set to match forecasts.
Lloyds’ update helped limit falls seen after Swiss bank UBS revealed write-downs of £5 billion, with an upbeat US opening also helping the FTSE 100 Index to close up 10.5 points at 6565.4.
The Footsie had kicked off the session in the red following the revelation from UBS and fell more than 30 points before recovering thanks to a rebound from banks and housebuilding stocks.
Lloyds TSB led the banks on the risers board, up 16.5p at 504.5p, with investors reacting well to its announcement on exposure to the credit crunch, which had been kept to £200 million.
Others that had dominated the fallers board in the early part of the day made gains, with Royal Bank of Scotland closing 6.5p higher at 490p and Barclays 3p brighter at 569p.
Ailing mortgage bank Northern Rock, meanwhile, endured a mixed session, dipping in and out of negative territory as worries surfaced over the ability of potential saviours to raise finance needed for their rescue plans. Shares closed 1.1p down at 109.5p.
Broker upgrades accounted for two of the Footsie’s leading performers, with Yellow Pages publisher Yell Group up 6% on positive noises from Merrill Lynch over the company’s US prospects. The shares advanced 23.5p to 419.75p.
B&Q owner Kingfisher also made good headway, up 6p at 165.2p, after analysts at ING said the company’s current share price undervalued healthy international growth prospects.
In contrast, Dixons and Currys firm DSG International eased 1.1p to 115.4p ahead of its likely relegation from the top tier when the FTSE reshuffle takes place later this week.
Pub group Mitchells & Butlers – which is also among those likely to drop out of the premier league – fell, losing 8.25p to 499.25p.
Commodity stocks were on the back foot, with Royal Dutch Shell 27p lower at 1969p amid reports of budget-busting cost overruns on a major natural gas project in Qatar.
Other peers under pressure included BP, off 3.5p at 616p, and Tullow Oil, which fell 4.5p to 655.5p.
In the FTSE 250, construction group Alfred McAlpine rose 7% or 34p to 525p after it agreed a takeover by rival Carillion.
Elsewhere, menswear specialist retailer Moss Bros surged 22%, or 8.25p, to 45.5p, after Icelandic investment firm Baugur confirmed it was considering a possible offer for the business. Baugur already owns a 29% stake in the retailer.
The biggest Footsie risers were Yell Group up 23.5p at 419.75p, Persimmon ahead 36.5p at 830.5p, Wolseley up 31.5p at 765p and Taylor Wimpey up 9p at 223.5p.
The biggest Footsie fallers were International Power down 7.75p at 466p, Mitchells & Butlers off 8.25p at 499.25p, BAE Systems down 7.5p at 466.25p and Punch Taverns down 12.5p at 827p.