Halifax Bank of Scotland led a poor session for financial stocks today as shares returned below the company’s rights issue price of 275p a share.
Lloyds TSB was another faller amid concerns among investors about the bank’s reported interest in a possible £6bn (€7.6bn) takeover in Germany.
Energy stocks meant the FTSE 100 Index held on to positive territory, with the impact of higher oil prices leaving the top flight 19.7 points stronger at 5640.5 by mid-morning.
The London market is now even more weighted towards the commodity sector after mining firm Ferrexpo and oil and gas services firm Petrofac replaced Persimmon and Alliance & Leicester in the top flight’s latest reshuffle.
Oil prices rose again as traders shrugged off Saudi Arabia’s pledge to increase its production if needed, focusing instead on disruptions to Nigerian supply and heightened Middle East tensions.
BP added 4.25p to 568.75p, while Royal Dutch Shell added 14p to 1924p and Cairn Energy lifted 24p to 3170p. Among the miners, Lonmin gained 43p to 3210p and Eurasian Natural Resources lifted 36p to 1488p.
HBOS fell 8.75p to 273.25p after UBS trimmed its target price and traders digested speculation that no-one will be punished by the City watchdog following the rumour-fuelled slump in the company’s share price in March.
Lloyds TSB was down 4.5p to 323p amid concerns about its expansion plans.
There was little in the way of corporate announcements, although two second-tier stocks took their chance in the spotlight by posting strong updates.
Temporary power supplier Aggreko saw its shares lift 8%, or 53p to 697.5p, after it said it expected a 40% jump in half-year profits.
There was also a gain of 22.5p to 940.5p for engineering firm Weir, which said it expected profits to be near the top end of market hopes.