DCSIMG

Stocks: Banks lead the charge for the Footsie

  • by PETER RANSCOMBE
 

SPECULATION that Royal Bank of Scotland will follow Barclays’ example and make swingeing cuts at its investment banking operations lifted financial stocks yesterday.

Barclays raced to the top of the risers’ board – climbing 8.6 per cent or 25.85p to close at 327.35p, a two-year high – after traders gave a warm welcome to new chief executive Anthony Jenkins’ strategy.

RBS ended the day up 4.1 per cent or 13.9p at 354.2p, while Lloyds Banking Group gained 5.1 per cent or 2.7p to 55.45p. Will Hedden, a senior trader at IG, said: “With the focus on the investment banking changes, there are a few people who expect RBS to be quite aggressive with its investment bank and push through job cuts.”

Strength from the banking stocks propelled the broader FTSE 100 index up 61.32 points or 1 per cent to 6,338.38 and helped to outweigh weakness among the miners.

Glasgow-based temporary power supplier Aggreko rose by 2 per cent or 31p to 1,612p after analysts at HSBC upgraded the stock to a “neutral” rating.

Fellow FTSE 100 constituent BAE Systems headed in the opposite direction – falling 1.8 per cent or 6.1p to 330.4p – after analysts at JP Morgan initiated coverage on the stock with a “neutral” rating and a 330p target price.

Shares in Flybe took a nosedive after Ryanair revealed that the European Commission will block its hostile takeover of rival Aer Lingus. Flybe has agreed to take on 43 Aer Lingus routes if the deal goes through.

Flybe dropped 11.8 per cent or 6.75p to close at 50.25p.

Online grocery delivery firm Ocado notched up a second day of gains – climbing 7.7 per cent or 9.8p to 137.1p – amid further takeover speculation.

NEW YORK: The Dow and S&P 500 closed modestly higher last night, putting the Dow within striking distance of all-time highs as investors looked ahead to President Barack Obama’s State of the Union address.

The Dow Jones industrial average was up 47.77 points, or 0.34 per cent, to close at 14,019.01 while the broader Standard & Poor’s 500 Index ended up 2.43 points, or 0.16 per cent, at 1,519.44. The Nasdaq Composite Index finished down 5.51 points, or 0.17 per cent, at 3,186.49.

 

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