FRIDAY MARKET CLOSE: Risk regulation change helps banks

Britain’s financial stocks made gains after the Bank of England’s watchdog took a surprisingly lenient view of pension risks.

Michael Hewson, chief market analyst at CMC, said: “The best performing sector has been financials after the Bank of England eased back slightly on banks equity capital requirements for next year, with Barclays leading the move higher followed by Lloyds and Standard Chartered.”

Barclays topped the FTSE 100 risers’ board, adding 2.3 per cent at 271.7p. Lloyds Banking Group gained 0.5p to 77.4p while Standard Chartered put on 5.5p at 1,448.5p.

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But Royal Bank of Scotland moved in the opposite direction, down 5.7p to 327.2p as the Financial Conduct Authority said it would appoint an independent investigator to review allegations over the bank’s treatment of small businesses.

In currency markets, the pound held on to gains seen after Thursday’s move by the Bank of England to scrap its Funding for Lending Scheme (FLS) for mortgages. Shares in housebuilders, which had slumped following the FLS announcement, steadied as some investors decided it presented a buying opportunity.

In the second tier, Redrow lifted 7.9p to 281.4p and Crest Nicholson rose 12p to 357p, but Charles Church-owner Persimmon slipped a further 10p to 1,160p in the FTSE 100.

The benchmark index lost early session gains to stand 3.9 points lower at 6,650.57, ending the month on a downbeat note.

It has shed 81 points over November, falling back from recent highs in October, but most traders still expect the Footsie to rally towards the 7,000 mark again in December as it plays catch up with other major benchmarks.