Banks gain as G20 gives a nod to QE

banking stocks yesterday benefited from the G20’s endorsement of Japanese money printing and the choice of an experienced president in Italy.

As fears eased over Italian debt following the re-election of 87-year-old Giorgio Napolitano, shares in Lloyds Banking Group added 3.5 per cent at 49.13p despite the company announcing a share issue worth about £350 million.

Royal Bank of Scotland added 2 per cent at 286.2p, but the wider market gave back early gains in the face of disappointing data from the US.

Chris Beauchamp, market analyst at IG, said: “The positive atmosphere in European markets has fizzled out thanks to a bout of poor US housing figures. With existing home sales dropping instead of rising, evidence seems to be building that we are in for yet another difficult period for equity markets.”

The FTSE 100 closed 5.97 points lower at 6,280.62.

Miner Randgold Resources was the biggest top flight riser as gold continued to rebound from its recent sell-off, up 4.4 per cent at 4,870p, but other commodities remained under pressure. Oil industry contractors and suppliers were the worst affected, with Amec down 3.4 per cent at 965.5p. Petrofac and Weir Group both slipped 2.7 per cent to 1,267p and 2,074p respectively.

Edinburgh-based Cairn Energy was lower even as the Indian subsidiary in which it still holds a minority stake reported its highest ever revenues and net profit.

Cairn India posted a 48 per cent rise in revenues to $3.2bn, but with Brent crude staying resolutely below $100 a barrel, shares in the Scottish explorer were 5.6p lower at 279.3p.

NEW YORK: Wall Street extended gains and the Nasdaq rose more than 1 per cent last night, with shares of Microsoft boosting both the Nasdaq and the S&P 500. Microsoft gained 4.1 per cent to $30.99 after CNBC reported that ValueAct Capital had taken a $2 billion stake.

The Dow Jones industrial 
average closed up 29.33 points, or 0.20 per cent, at 14,576.84 while the Standard & Poor’s 500 Index ended up 9.11 points, or 0.59 per cent, at 1,564.36. The Nasdaq Composite Index was up 31.44 points, or 0.98 per cent, at 3,237.50.