Prospective Barclays deal gives FTSE impetus

A reported $10bn (€7.4bn) deal in the offing for Barclays' asset management arm gave bank stocks a shot in the arm today.

Barclays leapt as much as 10% higher at one stage, helping its rivals recover ground lost in this week’s sharp correction.

There were modest gains for the wider FTSE 100 Index, ahead 34.9 points at 4398 in mid-morning trading.

Investors had little in the way of corporate news to digest, but stand poised ahead of key US inflation data due out later.

Barclays led the shares bounce back with a rise of 23.25p to 276.25p, while Royal Bank of Scotland added 2.3p to 41.8p and Lloyds Banking Group cheered 4.1p to 91.9p.

The welcome rally for the sector, following heavy losses earlier in the week, came after the Financial Times said potential bidders for the Barclays fund management arm included US money manager BlackRock.