FTSE marginally down as investors pause for breath

Blue-chip banks were in focus on the London market today amid more news on bonuses as investors awaited annual results from the part-nationalised players.

Blue-chip banks were in focus on the London market today amid more news on bonuses as investors awaited annual results from the part-nationalised players.

Royal Bank of Scotland leapt 4% ahead, while Lloyds Banking Group was under the spotlight as it confirmed boss Eric Daniels would forego his annual bonus payment for 2009.

The wider market struggled for direction – closing down 6.1 points at 5352.1 - as investors paused for breath on both sides of the Atlantic following last week’s volatility.

The Dow Jones Industrial Average clung to its opening mark, down around 20 points in the first few hours, despite another round of upbeat earnings from firms including Campbell Soup.

London’s Footsie started on the front foot after the Nikkei and Hang Seng rose by more than 2% in Asia, as traders decided the US Federal Reserve’s move to pull one of its emergency supports for the financial system was an encouraging sign for the US economy.

The Fed’s surprise move caused volatility in London on Friday, but a late session rally helped maintain the recent Footsie rally that has seen it recover more than 300 points since the start of February.

Meanwhile, the dollar fell against a number of major currencies today as reports of a rescue for debt-laden Greece lifted the euro and sterling. The pound was up 0.1% at $1.55.

The weaker dollar pushed up the price of oil, which hit a six-week high of more than $80.5 a barrel at one stage.

Among stocks in London, miners benefited from the improved economic sentiment as Eurasian Natural Resources lifted 31p to 1065p and Vedanta Resources cheered 76p to 2630p.

Outsourcing and distribution firm Bunzl was top of the risers board as annual results showing improved margins and a 6% rise in annual profits meant its shares gained 25p to 678p, or 4%.

Banks were also among the main share risers, as their bonus plans once again took centre stage.

The decision by Lloyds chief executive Mr Daniels sees him follow the lead of bosses at rivals RBS and Barclays in giving up multi-million pound windfalls to appease public concerns.

Lloyds shares rose 1.15p at 51.67p, while RBS lifted 1.25p to 35.78p ahead of their results on Friday and Thursday respectively.

Barclays, which last week reported a 92% leap in pre-tax profits to £11.6 billion, lifted 4p to 316.25p.

However, Primark owner Associated British Foods eased back from recent gains - down 3p to 934p – as investors consolidated profits following today’s strong trading update that predicted further growth throughout the remainder of the year.

The biggest Footsie risers were Bunzl ahead 25p at 678p, Royal Bank of Scotland up 1.25p at 35.78p, Eurasian Natural Resources up 31p at 1065p and Vedanta Resources up 76p at 2630p.

The biggest Footsie fallers were Next down 57p at 1884p, GlaxoSmithKline off 31.5p at 1203.5p, Marks & Spencer down 8.4p at 334p and Thomas Cook off 4.3p at 236.9p.

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