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MONDAY MARKET CLOSE: Portuguese bailout sees Footsie little changed

  • by SCOTT REID
 

Britain’s benchmark share index was little changed today as traders studied the rescue of Portugal’s troubled lender Banco Espirito Santo with relief.

The group will be lent €4.9 billion (£3.9bn) from the country’s bailout fund, with its assets split into separate good and bad bank operations.

The resolution helped shore up confidence after a turbulent few sessions in which political and economic events triggered a correction for world markets.

The FTSE 100 Index edged down 1.66 points to 6,677.52. Tony Cross, market analyst, Trustnet Direct, said: “There do seem to be concerns creeping back in over the health of the economies on the Iberian Peninsula and although this may largely revolve around Portugal in the wake of another bank bail out, there’s just a veneer of uncertainty building over the broader outlook.”

A solid set of half-year results from HSBC meant that banking stocks were on a firmer footing, with Lloyds Banking Group edging up 0.01p to 73.3p and Royal Bank of Scotland ahead 2.5p at 352.5p.

HSBC was one of the top flight’s biggest risers, despite reporting a 12 per cent drop in half-year profits as it counted the cost of weakness in investment banking due to lower trading volumes.

But with the figures broadly in line with expectations and the bank signalling the potential benefit from rising UK and US interest rates over the next few months, shares were 5.7p higher at 635p. But Barclays slipped 0.3p to 224p.

Risk-driven stocks were on the front foot with commodities giant Glencore up 3.6p to 359.8p and Rio Tinto up 6p to 3360.5p.

In corporate news, shares in insurer Esure were 1.3p higher at 258.5p after it posted a “solid” set of half-year results, with pre-tax profits up 0.4 per cent to £57.1 million despite the impact of downward pressure on car insurance premiums.

 

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