Markets: RBS tops risers as FTSE charges on

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Royal Bank of Scotland led the market rebound yesterday as banking, oil and mining stocks benefited from remarks that the recent rise in bond yields was not warranted by the state of the UK economy.

Concluding its July rate-setting meeting – the first presided over by new governor Mark Carney – the Bank of England left interest rates and quantitative easing unchanged. The European Central Bank also held rates.

But both banks surprised markets by issuing statements which reassured investors that there were no near-term prospects for monetary policy tightening.

RBS rebounded 14.1p or 5.2 per cent to 284.1p, making it the biggest top-flight riser. Standard Chartered wasn’t far behind, up 69p to 1,496.5p – a jump of 4.8 per cent.

The benchmark FTSE 100 index rose more than 3 per cent, or 191.8 points, to close at 6,421.67. All bar two companies in the blue-chip index increased in value. In France, the Cac-40 rose 2.9 per cent while Germany’s Dax was up by 2.1 per cent.

IG senior market strategist Brenda Kelly said: “Little was expected from either the European Central Bank or Bank of England, yet much was delivered. While both interest rates remained unchanged, the central banks appeared to be at pains to appease investors’ fears that tighter monetary policy was imminent.”

EasyJet shares were up by more than 3 per cent. The airline said it carried 100,000 more passengers in June than in the same period last year, a 1.9 per cent rise taking the total to 5.5 million. The stock has risen more than three-fold in the last two years and climbed further yesterday, up 47p to 1,367p.

Housebuilders did well on the FTSE 250 as a trio of positive updates reflected improving consumer confidence, the brighter economy and UK government stimulus schemes.

Taylor Wimpey, which said it would write back some of the value slashed from its UK business during the downturn, rose 6.8p to 103.8p, a gain of 7 per cent.

Redrow surged 7 per cent or 15.9p to 237.9p after it said pre-tax profits for the year to June would be ahead of City forecasts.

NEW YORK: US markets were closed for the Independence Day holiday.