No bloodbath on FTSE

The London market avoided another bloodbath today after the FTSE 100 Index completed the first hour of trading less than 40 points lower.

The drop of 0.8% – or 36.9 to 4781.9 – was much better than initial City forecasts for a slide of 200 points or more. However, the market remained on edge after last night’s shock rejection of the $700bn (€487bn) bank bail-out.

The market’s resilience came despite another difficult session for banks, with Halifax Bank of Scotland off 11% or 15.5p to 126.5p and merger partner Lloyds TSB down 10.75p to 206.5p.

Royal Bank of Scotland was 8.7p lower at 172.3p, a drop of 5% after it told investors that the acquisition of ABN Amro assets would not be affected by the forced sale of a stake by bid partner Fortis.

The major corporate news came from Tesco, which rose 4% or 15.5p to 385.4p after it reported a 10% rise in half-year profits and said it was making inroads in the battle against discount rivals.

Pubs chain Enterprise Inns rose 20.25p to 177.5p – up 12% – after it described trading as robust and said it remained on track to meet profit expectations.