Tuesday market close: Banks boost FTSE as fears ease over Italy

Trader monitoring market activity. Picture: AFP/Getty Images

Trader monitoring market activity. Picture: AFP/Getty Images

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Financial stocks led the charge on the London market as concerns eased over the state of Italy’s beleaguered banking industry.

The FTSE 100 Index closed up 33.01 points to 6,779.84, as British lenders raced ahead on reports that the world’s oldest bank, Italy’s Monte dei Paschi di Siena, might be handed a state bailout to shore up its balance sheet.

Royal Bank of Scotland was the biggest riser on the London market, climbing 11.3p to 209.1p, while Barclays rose 9.9p to 226.8p. However, Spreadex analyst Connor Campbell said gains made by lenders “were countered by a rouged set of commodity stocks” with Anglo American down by about 4 per cent to 1,194p, for example.

On the currency markets, the pound hit a two-month high against the US dollar, before falling 0.4 per cent to $1.268. Sterling came under pressure after the greenback strengthened on hopes that the steady US economy may force the US Federal Reserve to raise interest rates sooner than initially thought. The pound was up 0.2 per cent versus the euro at €1.184.

In UK stocks, construction equipment firm Ashtead rose 16p to 1,556p after it said pre-tax profit rose 25 per cent to £413 million in the six months to 31 October, helped by the collapse in the value of the pound, as organic growth and acquisitions also boosted the balance sheet.

The biggest risers on the FTSE 100 Index included HSBC up 27.3p to 654p and Travis Perkins up 48p to 1,405p.

The biggest fallers were Anglo American down 48.5p to 1,194.5p, Johnson Matthey down 89p to 3,004p, Paddy Power Betfair down 215p to 8,135p and Sage Group down 13.5p to 619.5p.

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