Strong results sees FTSE surge

The FTSE 100 Index roared to its highest close since last October today as strong banking results and a renewed surge from mining stocks cheered investors.

The FTSE 100 Index roared to its highest close since last October today as strong banking results and a renewed surge from mining stocks cheered investors.

Barclays and HSBC surged almost 7% and 5% respectively after half-year surpluses of £3bn (€3.5bn) and US$5bn (€3.47bn).

Miners were buoyed by renewed economic recovery hopes, while positive construction and manufacturing data also put US markets on the front foot. The Footsie closed 1.6% or 74.1 points ahead at 4682.5.

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, which were underpinned by a surge in investment banking profits.

The performance by Barclays was in line with market expectations, leading shares 20.25p higher to 322.55p, while HSBC was ahead 30.15p to 635.9p after a stronger-than-expected result for the six months to June 30.

The rest of the sector was encouraged ahead of their own results later in the week, with part-nationalised Royal Bank of Scotland up 1.57p to 46.41p and Lloyds Banking Group ahead 0.25p to 85.25p. Asian-facing Standard Chartered was 15p up at 1436p.

Meanwhile the mining sector was propelled by economic optimism, with Kazakhmys ahead 75p at 931.5p, Xstrata 57.3p higher at 865.5p and Eurasian Natural Resources 61.5p higher at 925p. The push was helped by copper prices hitting a ten-month high.

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 3.1p to 145.5p today.

Other stocks to gain at the end of last week fared less well, with BSkyB and BT Group both lower after enjoying rises in the wake of results.

The bout of profit-taking meant BSkyB gave back almost 3% or 15.5p to 530.5p, while BT was 1.3p cheaper at 125.35p after rising by more than 10% on Thursday following encouraging signs in first quarter results.

Defensive stocks also suffered as investors showed more risk appetite. British American Tobacco and Imperial Tobacco fell 35p to 1823p and 42p to 1669p respectively.

Outside the top flight, shares in All Bar One owner Mitchells & Butlers rose nearly 3% or 7.85p to 268.1p after the company announced the appointment of chief operating officer Adam Fowle as its new chief executive.

Analysts welcomed the move and said it increased the chances that Mitchells will make a move for Spirit, the managed pubs arm of Punch Taverns.

On the results front, property firm Hammerson edged up 2.45p to 347.2p after it announced the retirement of chief executive John Richards and reported a wider first-half loss.

The biggest Footsie risers were Petrofac up 86.5p at 837p, Kazakhmys up 75p at 931.5p, ENR up 61.5p to 925p and Xstrata up 57.3p to 865.5p.

The biggest Footsie fallers were BSkyB down 15.5p at 530.5p, Imperial Tobacco down 42p at 1669p, Reckitt Benckiser off 68p at 2808p and BAT down 35p at 1823p.

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