Gains for FTSE

A possible Treasury-backed solution to the credit squeeze lifted bank stocks today as the FTSE 100 Index held firm above the 6000 mark.

The sector accounted for four of the top six Footsie risers amid hopes Chancellor Alistair Darling could unveil proposals for the sector to swap their riskier assets for Government bonds as early as next week.

The London market held on to its gains of more than 2% in the previous session, with Alliance & Leicester setting the pace after a gain of 4%, or 21p to 524p.

The rest of the London market was also on the front foot, with the Footsie consolidating its position above the 6,000 barrier – up 8.4 points at 6054.6 by mid-morning.

Among other banking stocks, Halifax Bank of Scotland lifted 19.5p to 559p, Barclays rose 17.25p to 496.25p and Royal Bank of Scotland cheered 11p to 386p.

The other big move of the session came from closed life fund Resolution after the Financial Services Authority approved its change of control through a proposed takeover by Pearl Assurance. Resolution shares were 18.5p higher at 715p.

The retail sector continued to be dogged by uncertainty amid challenging trading conditions. Marks & Spencer topped the Footsie fallers board with a drop of 5.75p to 365.5p, while Next dipped 17p to 1131p and Sainsbury’s eased 2.75p to 371p.

Meanwhile, SABMiller returned to favour after shares in the brewer fell yesterday in the wake of a trading update. Shares stood 58p higher at 1178p, a gain of 5%.

Home shopping and educational supplies group Findel fell 38% in the FTSE 250 Index, the drop reflecting a warning that profits will be below previous expectations due to higher bad debt provisions. Shares were down 170.75p at 273.75p.