FTSE slightly up at market close

The FTSE 100 Index broke a five-day losing streak today, but banks proved a rare bright spot amid subdued trading in London.

The blue-chip index added just 11.5 points to 4018.4 by the close, although big gains for Royal Bank of Scotland, Lloyds Banking Group and Barclays failed to lift the mood.

Wall Street’s Dow Jones Industrial Average was virtually flat in early trading as mixed economic news gave investors few clues, although oil prices rose on lower-than-expected US inventory figures.

In London, the latest figures showing record Government borrowing of £67.2 billion between April and January failed to jolt blue-chips, while sterling held its own against the dollar and euro.

The banking sector was meanwhile making eye-catching gains, with RBS clawing back the heavy losses seen yesterday on reports it may have to fork out £8 billion to tap into the Government’s toxic debt insurance scheme.

Shares in RBS jumped 17% or 3.7p to 21.8p, making it the Footsie’s leading riser. Brokers at KBW cut Lloyds’ target price but the bank nonetheless followed close behind, adding 6p to 56.8p – a gain of 10%.

Barclays got in on the act with a 7.8p advance to 101.1p, almost 8% better.

They were joined on the Footsie risers board by defence group BAE Systems after annual earnings of £1.9 billion exceeded market expectations and the company said it was confident of further growth in 2009. Shares were up 13.75p at 400p.

Oil prices rising on the US data sent crude to almost 39 dollars a barrel, helping many players in the sector. BP firmed 5.5p to 483.25p, while Tullow Oil added 14p to 702.5p.

B&Q owner Kingfisher flitted between positive and negative territory after reporting a 5.9% like-for-like quarterly sales decline at the DIY chain.

It was an improvement on the previous quarter, but Kingfisher said UK sales remained under pressure, sending shares down 3.1p to 128.7p. Its rival, Homebase owner Home Retail Group, was 4p better at 222p.

Drinks can firm Rexam was a prominent faller in the top flight despite reporting a 34% increase in full-year profits.

But the firm offset this by revealing that trading weakened in the second half of the year. The shares were steady at first, but later retreated to show a drop of more than 11%, down 31p at 278.5p.

Pharmaceuticals firm Shire meanwhile fell 7% after fourth-quarter sales fell short of market hopes. Shire held its guidance for 2009, but the shares were 66.5p lighter at 942.5p.

Under-pressure insurer Legal & General also took more losses today as it cut payouts to with-profits policyholders. L&G, which has shrugged off concerns about its capital position in recent days, lost 2.4p to 37.6p.

The biggest Footsie risers were RBS up 3.7p at 21.8p, Lloyds ahead 6p at 56.8p, Barclays up 7.8p at 101.1p and Rio Tinto up 116p at 2000p.

The biggest Footsie fallers were Old Mutual down 6p at 41.1p, Rexam off 31p at 278.5p, Shire down 66.5p at 942.5p and Legal & General down 2,4p at 37.6p.