Banking stocks shore up FTSE

Barclays shares swung into positive territory today after the bank overcame an initially lukewarm reaction to full-year profits of £7.1bn (€9.4bn).

Shares opened 2% lower, but sentiment turned as Barclays eased credit crunch fears with a smaller-than-expected write-down of £1.6bn (€2.1bn).

A number of banking shares followed the lead of Barclays, enabling the FTSE 100 Index to recover an earlier 60 point loss to stand 0.4 points higher at 5947 by mid-morning.

Today’s improvement from Barclays – up 3% or 15p to 475p – added to the 8% rise seen on Monday after the City reacted to speculation about a 10% dividend increase in the company’s results today.

With the dividend duly delivered, attention turned to other banks with full-year results in the next few days.

The biggest gain came from Halifax Bank of Scotland, with shares ahead 3% or 18.5p at 657.5p.

Lloyds TSB was 2% stronger – up 8p to 432.5p – as investors positioned themselves ahead of results on Friday.

Other strong risers included InterContinental Hotels, up 3% after it delivered results at the top end of expectations. It also outlined plans for strong expansion in China ahead of the Olympics, causing shares to rally 23p to 794.5p.

Cadbury Schweppes led the Footsie fallers board, down 6% or 38.5p to 574p, after the absence of a return of cash to shareholders overshadowed annual results in line with expectations.

Mining companies occupied many of the other places on the risers board, helped by a gain in commodity prices. Anglo American set the pace with an improvement of 49p to 3153p while BHP Billiton was ahead 24p at 1642p.

Elsewhere, airline easyJet rose 4% after it reported strong trading at GB Airways, the business it acquired from British Airways last year. Shares were 16.75p at 429.25p.