FTSE on the rise

The British taxpayer was sitting on an estimated £1.2bn (1.4bn) paper profit on its stake in Royal Bank of Scotland today as the rally in the financial sector continued apace.

The British taxpayer was sitting on an estimated £1.2bn (1.4bn) paper profit on its stake in Royal Bank of Scotland today as the rally in the financial sector continued apace.

Part-nationalised RBS soared 10%, or 4.75p to 53.45p, marking the first time the British government's stake closed above water since bailing the bank out in return for shares.

Lloyds also made further strong gains in another stellar session for financials, which helped the FTSE 100 Index rise 43.4 points to 4690.5.

The market maintained its momentum despite shock news from the Bank of England that it would pump an extra £50bn (€58.4bn) into the economy through its quantitative easing (QE) scheme.

While the bank's announcement had little impact on stock markets, the pound slipped as traders trimmed back expectations about when the UK central bank would start to raise rates and withdraw monetary stimulus.

There was meanwhile a subdued start on Wall Street as the Dow Jones Industrial Average struggled to make headway amid conflicting economic signals.

New evidence that US staff layoffs are stabilising was offset by sluggish retail sales reports.

However, the London shares rally looked back on track, thanks to double digit gains from banking giants.

Lloyds Banking Group was up more than 12% after its better-than-expected losses yesterday and news that the worst may be over for HBOS bad debts.

Shares rose 11.5p to 104.7p.

RBS followed ahead of its interim results tomorrow, with Barclays also ahead with a 17.5p boost to 354p.

Barclays and HSBC - up 33.8p to 661p - had already impressed the market with combined profits of £6 billion on Monday and results from rivals since have gone down well with investors.

Half-year figures from Aviva, Unilever and ITV were likewise well-received.

Aviva rose 5% or 19.4p to 375.7p, as better-than-expected operating profits and a solvency surplus of £3.2bn (€3.7bn) offset any disappointmentregarding a 31% dividend cut.

Unilever shares enjoyed a gain of 5% - up 84p to 1629p - after traders were encouraged by a return to sales volume growth during the second quarter.

Outside the top flight, broadcaster ITV gained 0.56p to 42.56p after it said the decline in advertising revenues should slow over the rest of this year. The company also announced the sale of Friends Reunited for £25m (€29.2m).

Bellway shares rose 6p to 785p after it echoed recent positive comments on the housing market and announced a £45m (€52.6m) fundraising to support land-buying opportunities in the south.

Ladbrokes rose 3.6p to 171.1p despite reporting a fall in profits and cuts to its dividend payout.

The company said cancellations and poor margins in horse racing and a first ever loss-making month on football added to pressure caused by recession.

The biggest Footsie risers were Lloyds Banking Group up 11.5p at 104.7p, Royal Bank of Scotland ahead 4.75p to 53.45p, British Land up 32.5p at 497.9p and 3i Group up 18.5p to 299p.

The biggest Footsie fallers were Severn Trent down 43.5p to 934p, Antofagasta off 28.5p to 726p, Kazakhmys down 33p to 921p and United Utilities down 14.5p to 435.5p.

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