A resilient performance from the scandal-hit banking sector and better-than-expected retail sales figures helped the FTSE 100 Index hold firm today.
London’s leading shares index rose 1.5 points to 5834.5 as banking shares shrugged off fears of further Libor-rigging fines after US authorities summoned three of the UK’s biggest lenders for questioning.
HSBC, Royal Bank of Scotland and Barclays were among seven banks to be handed legal notices demanding that they assist in an inquiry by the attorneys general of New York and Connecticut, raising worries over future penalties and further damage to the sector’s reputation.
But with an S&P report confirming a “stable” outlook on most UK banks, Barclays was up 3.1p at 186.2p, Royal Bank of Scotland was ahead 5.7p at 227.3p and HSBC rose 2.6p to 564.8p.
Lloyds, which has not received a legal notice, was one of the biggest top flight risers, ahead 3%, or 1p at 33p.
But scandal-hit Standard Chartered bank was on the fallers board, down 8p at 1,418.5p, as it gave back some of yesterday’s gains seen on relief over its lower-than-anticipated settlement with New York regulators over allegations it hid transactions with the Iranian government.
And retailers were boosted by a surprise 0.3% rise in retail sales volumes between June and July, defying expectations of a slight fall, while June’s figures were revised up to 0.8% compared with a previous estimate of a 0.1% rise.
Tesco and Marks & Spencer were among the biggest risers, up 5.7p at 338.3p and 5.7p to 360p respectively.
Meanwhile, America’s Dow Jones Industrial Average was 0.4% higher as the London market closed despite mixed economic data having stoked doubts about whether the Federal Reserve would pump more money into the economy in coming months.
Germany’s Dax and France’s Cac-40 were up 0.7% and 0.9% respectively amid rumours that Spain is on the brink of receiving the first tranche of its banking bailout, which helped lower the country’s implied borrowing costs on bond markets.
The pound rose to 1.57 against the dollar after being boosted by the better-than-expected retail sales data. But sterling was down at 1.27 against the euro after the single currency was lifted by the rumours of central bank intervention for Spain.
Mining stocks also made gains following dovish comments from China indicating there was room for interest rates to fall further.
Kazakhmys rose 20p to 735p and Evraz was ahead 7.2p at 269.6p.
Meanwhile, African Barrick Gold was the biggest FTSE 250 riser with an 8% gain - up 31.4p to 425p – as hopes of a takeover were raised on confirmation that its parent group was in talks to sell its 74% stake in the London-listed miner to China National Gold Group.
The biggest Footsie risers were IMI up 34p at 918.5p, Lloyds ahead 1p at 33p, Kazakhmys up 20p at 735p, and Evraz ahead 7.2p at 269.6p.
The biggest Footsie fallers were Pennon down 14.5p at 749.5p, Eurasian Natural Resources off 7.2p at 372.4p, Vodafone down 3.2p at 185.6p, and Admiral off 20p at 1162p.