Barclays led another day of gains for the banking sector today as shares raced ahead after it confirmed it was unlikely to need to raise more cash to bolster its finances.
The banking giant saw shares soar 24% to their highest level in more than two months following news the Financial Services Authority had given it the all clear after stress-testing the bank’s loan book.
It was a more lacklustre day for other blue chip stocks, with the FTSE 100 Index closing 26.4 points down at 3898.9.
There were also early falls on Wall Street as the Dow Jones Industrial Average succumbed to profit taking.
UK investors focused their attention on Barclays, as its announcement means it should be able to participate in the British government’s toxic asset scheme without having to hand a stake to the taxpayer.
Shares in the group rose 33.7p to 173.8p.
Miners put the market under most pressure, with Eurasian Natural Resources down 35.75p at 444.25p, Lonmin off 64p at 1429p and Kazakhmys 18.25p cheaper at 378.75p. The declines reflected Deutsche Bank’s decision to review its target prices in the sector.
The recent weakness in the insurance sector continued as the ’big two’ of Prudential and Aviva slid 20p to 327p and 8p to 237p respectively.
On the risers board, Lloyds Banking Group joined Barclays on the way up following a gain of 10% or 7.1p to 76.1p. Royal Bank of Scotland remained unchanged at 26.6p, but HSBC rose 3.25p to 402.5p.
Shares in construction firm Balfour Beatty experienced a rollercoaster ride after initially surging 5% on the back of a broker upgrade from Morgan Stanley. But this was later reversed as the stock stood 1% or 1.75p lower at 333.25p.
Retailers were under pressure for a second successive session, with Marks & Spencer down 1% as investors braced themselves for another gloomy update from the chain. Shares dipped 3.5p to 265.25p ahead of Tuesday’s report, while Next fell 19p to 1255p in the wake of yesterday’s profits fall.
In the supermarket sector, Sainsbury’s drifted 13p to 308p and Tesco fell 13.6p to 317.5p.
But B&Q owner Kingfisher gained 0.5p to 139.5p after losing ground yesterday following its annual results.
On a quiet day for corporate news, Dairy Crest shares jumped 15% near the top of the FTSE 250 Index after the firm reported strong sales figures for its Country Life and Clover butter and spreads division. With the group also improving its debt position through the sale of a 49% stake in Yoplait Dairy Crest, shares rose 34p to 258.5p.
Fellow dairies firm Robert Wiseman also benefited from the positive sentiment in the sector, as shares rose 7.5p to 345p.
The biggest Footsie risers were Barclays ahead 33.7p at 173.8p, Lloyds Banking Group up 7.1p at 76.1p, British Land up 25p at 377.75p and Rio Tinto up 96p at 2478p.
The biggest Footsie fallers were Eurasian Natural Resources down 35.75p at 444.25p, Prudential off 20p at 327p, Icap down 14p at 288p and International Power off 10p at 207p.