A volatile week for the FTSE 100 Index was underlined today after the index staged an 80 point turnaround to break back through the 5800 barrier.
Healthy recoveries for banks, housebuilders and retailers, who were all under the cosh earlier this week, helped wipe out a 70-point deficit in the top flight index.
Trading was boosted after US economic data suggested rate setters across the Atlantic may keep interest rates on hold this month rather than raise them amid fears of mounting inflation, buoying the Footsie to close up 12.3 points at 5802.8.
Halifax Bank of Scotland was the leading share riser in London, gaining more than 13% thanks to City watchdog the Financial Services Authority saying that it was cracking down on betting against big share price falls.
Shares in the bank, which has launched a £4bn (€5bn) rights issue, plunged earlier this week below the discounted offer price of 275p, with “shorting” thought to be a factor behind the movement.
The FSA’s announcement helped HBOS extend the recovery seen yesterday and shares topped the Footsie risers’ board with a gain of 38.75p to 321.75p.
Banks were also lifted after European firm UBS got its rights issue away with strong investor support. Alliance & Leicester jumped 33.25p to 338.75p, while Royal Bank of Scotland added 7.25p to 236.25p, a gain of 3% after it continued its recent fundraising with the £3.6bn (€4.5bn) sale of Angel Trains.
Housebuilders enjoyed double digit percentage gains as investors eyed some value in the under-pressure sector.
Footsie firm Persimmon was up 10%, or 38.75p to 411.5p, while in the second tier, Barratt Developments was 10.25p higher at 86.5p, a gain of 13%. Taylor Wimpey gained nearly 16%, or 9.5p to 70.5p.
Retailers were also in better shape, with Carphone Warehouse recovering some of the weakness seen yesterday after downbeat comments from chief executive Charles Dunstone.
Shares gained 6% or 12.25p to 214.75p. Building materials firms Wolseley and Homebase owner Home Retail Group were also in the black, adding 25.5p to 511.5p and 4p to 219p respectively.
Oil prospector Cairn Energy was the biggest faller, down 4% or 142p to 3283p, with rival Tullow Oil off 33p at 887p as oil prices eased slightly.
Miners were also on weaker ground as metals prices dipped. Kazakhmys slipped 47p to 1550p and Eurasian Natural Resources fell 39p to 1321p.
Other big fallers were in the insurance sector, with Prudential down 10p at 628.5p and RSA Insurance off 1.9p at 137.7p.
The FTSE 250 Index’s biggest riser was newspaper publisher Johnson Press after speculation about takeover interest from the Far East. Shares rose 20%, or 11.75p to 69.75p.
The Footsie’s four biggest risers were HBOS, up 38.75p to 321.75p, Alliance & Leicester up 33.25p to 338.75p, Persimmon up 38.75p to 411.5p and Carphone Warehouse, which added 12.25p to 214.75p.
The four biggest fallers were Cairn Energy, down 142p at 3283p, Tullow Oil down 33p at 887p, Kazakhmys down 47p to 1550p and Eurasian Natural Resources, which closed 39p down at 1321p.