The London market broke its three-day losing streak today as strong gains from oil and commodity stocks offset another dire session for banks and property firms.
The FTSE 100 Index closed 46.4 points higher at 5667.2 despite heavy falls from the likes of Halifax Bank of Scotland and Land Securities.
HBOS led a poor session for financial stocks as shares returned below the company’s rights issue price of 275p.
HBOS, 12p lower at 270.25p, suffered after UBS trimmed its target price and one hedge funds revealed a “short” position of more than 3% in the bank – betting on a share price fall.
The news once more raised questions over the appetite for its £4bn (€5bn) investor cash call, with only a few days left before shareholders are set to vote on whether the move should go ahead.
Lloyds TSB was another faller amid concerns among investors about the bank’s reported interest in a possible £6bn (€7.6bn) takeover in Germany. Concerns about its expansion plans saw shares drop 8.75p to 318.75p.
Property firms were also a casualty of a downgrade from JP Morgan, denting shares. Land Securities lost nearly 5% or 64p to 1275p, closely followed by British Land, off 21p at 745p. Liberty International shed 23.5p to 881p.
Commodity stocks pushed the London market forward, with higher copper and oil prices helping trade.
Heavyweight miner Eurasian Natural Resources cheered 31p to 1483p, while BHP Billiton rose 21p to 1908p.
The Footsie also saw an already-strong commodities presence increased further today with the top tier debut of Ukrainian miner Ferrexpo and oil and gas services firm Petrofac.
Ferrexpo made an unspectacular start to life in the top flight, however, down 9p to 400p, although Petrofac fared better, up 13p at 738p.
Oil prices rose above US$137 a barrel at one stage as traders shrugged off Saudi Arabia’s pledge to increase production if needed, focusing instead on disruptions to Nigerian supply and heightened Middle East tensions.
BP added 10.25p to 574.75p, while Royal Dutch Shell added 36p to 1946p.
Pharmaceuticals firm Shire was the leading riser thanks to a Goldman Sachs upgrade, which lifted the firm nearly 6% or 45.5p to 842.5p. Peers AstraZeneca and GlaxoSmithKline advanced 65p to 2157p and 22.5p to 1121.5p respectively.
In the FTSE 250, housebuilders were knocked by Rightmove figures revealing that homeowners cut their asking prices by 1.2% during the past month as the reality of the housing market downturn hits home.
Persimmon – ousted from the FTSE 100 in the latest quarterly reshuffle – closed down 15.75p at 355p, or 4%. Taylor Wimpey also suffered a difficult session, off 7%, or 5p to 64.75p.
Also in the second tier, temporary power supplier Aggreko saw its shares lift 10%, or 64.5p to 709p, after it said it expected a 40% jump in half-year profits.
The biggest Footsie risers were Shire up 45.5p at 842.5p, Thomson Reuters ahead 51p at 1433p, Compass Group up 11.25p at 369.5p and AstraZeneca up 65p at 2157p.
The biggest Footsie fallers were Land Securities down 64p at 1275p, HBOS off 12p at 270.25p, Old Mutual down 3.7p at 100.1p and Wolseley off 15p at 430.5p.