Banking stocks help shelter FTSE

Stronger banking stocks helped shelter the London market from concerns about the impact of tropical storm Gustav today.

Financials recovered from a weak start after figures from France’s Credit Agricole fuelled hopes the sector may be over the worst in terms of credit crunch write-downs.

The FTSE 100 Index spent much of the morning in negative territory, before climbing to stand 12.5 points higher at 5540.6.

That was despite a fall for commodity stocks, with oil majors BP and Royal Dutch Shell lower amid worries about the impact of Gustav on production in the Gulf of Mexico region. Shell was 14p lower at 188p, while BP fell 2.75p to 523p.

Among those moving in the opposite direction, Halifax Bank of Scotland rose 13.75p to 307p and Barclays gained 10.25p to 340.5p.

Another busy session for corporate results focused attention on the FTSE 250 Index, with Premier Foods down 7.75p to 89.5p after a 29% fall in half-year profits. The Hovis maker said it remained on track to meet full-year forecasts, but analysts were concerned about its debt position and rising costs.

A positive trading update from Stagecoach failed to drive shares higher, with the stock falling 3.5p to 299.25p amid profit-taking after a strong recent run. The South West Trains operator revealed that profits since May had been better than expected, helped by stronger bus demand.

Property consultancy Savills offered a gloomy assessment on the house market, but received a positive reaction in the City after its half-year figures came in ahead of expectations.

Shares shot to the top of the risers board, up 25.25p to 267.25p, as investors welcomed the decision to maintain the half-year dividend.

Housebuilders were also cheered, with Taylor Wimpey up 3.25p to 51.5p following heavy falls yesterday.