Barclays results give banking shares a boost

Barclays gave bank shares a boost today as it unveiled better-than-expected profits of £6.1bn (€7.3bn) in a strong start to the sector’s annual results season.

But the wider FTSE 100 Index closed in the red – down 23 points at 6037.1p – as miners dragged it lower and after weak US retail sales figures hit sentiment on Wall Street.

The Dow Jones Industrial Average was more than 50 points lower in early trade after the US Commerce Department said retail sales rose 0.3% last month – half of market expectations.

Investors in London were also nervy after official figures revealed another rise in inflation last month to 4% from 3.7% in December.

Inflation will also stay top of the agenda tomorrow, with more insights due on the Bank of England’s stance on interest rates in its keenly-awaited quarterly forecast.

The inflation spike in January strengthened the pound as it heaped yet more pressure on the Bank to consider raising interest rates to calm inflation. Sterling rose to 1.61 dollars and just under 1.20 euros.

Among stocks, Barclays leapt to the top of the Footsie with a shares rise of 6% after reporting the 32% improvement in headline profits and revealing revenues up by a fifth at its investment banking division Barclays Capital in the final three months of 2010.

Barclays rose 18p to 328.8p and it gave a boost to others in the sector ahead of their full-year figures.

Lloyds Banking Group added 1.2p to 66.9p and fellow taxpayer-backed Royal Bank of Scotland lifted a penny to 45.3p.

Supermarket Morrisons was 5p dearer at 280p after unveiling the first major step in its e-commerce strategy with the acquisition of online retailer Kiddicare.

However, miners weighed on the top tier as copper prices fell. Antofagasta was the sector’s biggest faller, down 58p to 1428p.

In a busy session for corporate results, Premier Foods added 3.7p to 25.8p in the FTSE 250 after the Hovis and Mr Kipling owner said it had reduced its debt burden to below £1bn (€1.2bn) and lifted trading profits to £311m (€371m).

There was no such post-results boom for pizza delivery firm Domino’s, which gave back recent gains after revealing a sharp slowdown in sales growth since the start of its new financial year.

This took the shine off news of a 27% rise in underlying full-year profits to £38m (€45.3m), with shares down 20.5p to 502.5p.

Fellow second-tier stock Wood Group was also in the red as it gave back some of the gains seen yesterday after the oil and services support firm announced it had sold its well support arm to General Electric for $2.8bn (€2.07bn). Its shares were down 17p to 635p.

The biggest Footsie risers were Barclays up 18p to 328.8p, Royal Bank of Scotland ahead 1p to 45.3p, Morrisons up 5p to 280p and Lloyds Banking Group up 1.2p to 66.9p.

The biggest Footsie fallers were Arm Holdings down 28.5p to 622.5p, Antofagasta off 58p to 1428p, Anglo American down 130.5p to 3306.5p and Fresnillo down 42p to 1447p.