FTSE climbs slightly

The FTSE 100 Index remained near a four-month high today as encouraging signs from the US economy settled investors at the end of a nervy week.

Thursday's better-than-expected jobs and trade data eased fears that the world's largest economy might slip back into recession, while Asian markets were also lifted by stronger-than-expected growth from the Japanese economy.

The FTSE 100 Index was 3.8 points lower at 5490.2 amid thin trading volumes, with investors apparently content to keep their money on the table after a decent couple of weeks for the top flight.

Banking stocks experienced mixed fortunes ahead of the finalisation of European rules likely to require firms to hold capital reserves of at least 7%. While most banks' capital ratios are well above that, it represents a marked increase on the capital requirements seen before the financial crisis.

The sector has endured a testing week after high-profile leadership changes at Barclays and HSBC and amid reports that recent stress tests into 91 EU banks were not rigorous enough.

Barclays fell 3.8p to 319.5p but Lloyds Banking Group gained for a second straight session after a note from UBS yesterday argued that it looked "overcapitalised" following its £13.5bn (€16.4bn) rights issue and as loan losses inherited from HBOS came under control.

Lloyds shares rose another 1p to 75.7p, while fellow part-nationalised firm Royal Bank of Scotland lifted 0.9p to 49p.

In a quiet session for corporate news, shares in construction firm Morgan Sindall jumped 7% after it struck a £28m (€34m) deal to buy the bulk of the social housing contracts operated by collapsed firm Connaught.

Morgan's Staffordshire-based Lovell subsidiary said the newly-acquired contracts would generate around £200m (€242.8m) in additional annual revenues. Shares were 49.5p higher at 711p.

Meanwhile, JD Wetherspoon shares fell despite a 7% rise in the pub chain's annual profits and amid signs of a good start to its new financial year. Like-for-like sales were 1.5% higher in the six weeks to September 5, but this failed to satisfy investors as shares declined 4% or 18.8p to 424.7p.

Property website Rightmove moved in the opposite direction as investors considered the implications of German publisher Axel Springer's bid for French property website company SeLoger.com.

With analysts pondering the chances of a similar move for the UK's biggest player, Rightmove shares surged 7% or 50p to 757.5p, to leave it clear at the top of the FTSE 250 Index risers board.