New high for FTSE

The FTSE 100 Index set a new high for the year today after bumper profits fuelled hopes the worst may be over for the beleaguered banking sector.

The FTSE 100 Index set a new high for the year today after bumper profits fuelled hopes the worst may be over for the beleaguered banking sector.

Shares in Barclays and HSBC surged 7% and 6% respectively after half-year surpluses of £3bn and $5bn (€3.5bn).

With mining stocks also on the front foot due to renewed economic recovery hopes, the Footsie climbed more than 1% or 76.9 points to 4685.2 by mid-morning.

The absence of nasty shocks and positive noises on the trend for bad debts added to the upbeat mood in the banking sector following today’s results.

The performance by Barclays was in line with market expectations, leading shares 23.1p higher to 325.4p, while HSBC was ahead 34.35p to 641.1p after a stronger-than-expected result for the six months to June 30.

The rest of the sector was buoyed, with part-nationalised Royal Bank of Scotland up 2.46p to 47.3p and Lloyds Banking Group ahead 0.95p to 85.95p.

The mining sector was propelled by economic optimism, with Kazakhmys ahead 22.45p at 324.75p and Xstrata 52.8p higher at 861p.

Other movers included British Airways, which posted a second successive session of gains following its results on Friday. The airline posted the worst first-quarter loss in its history, but stabilisation hopes meant shares rose 6% on Friday and by another 2% or 2.8p to 145.2p today.

The biggest fall came from broadcaster BSkyB, which gave back 2% or 12p to 534p after strong gains seen in the wake of full-year results last week.

Outside the top flight, shares in All Bar One owner Mitchells & Butlers rose 3% or 8.65p to 268.9p after the company announced the appointment of chief operating officer Adam Fowle as its new chief executive.

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