Markets: Banks bounce as S&P backs progress

BRITAIN’S state-backed banks were among the biggest risers in London’s top flight tonight as ratings agency Standard & Poor’s said the sector had made good progress in strengthening its balance sheets.

Lloyds made the biggest gains, ahead 1p at 33p, as it avoided the attention that US regulators paid to some of its rivals.

Barclays, HSBC, Royal Bank of Scotland were among seven banks to be handed legal notices demanding that they assist in an inquiry by the attorneys general of Connecticut and New York relating to the Libor-rigging scandal, raising worries over future penalties and further damage to the sector’s reputation.

But with the S&P report confirming a “stable” outlook on most UK banks, Barclays was up 3.1p at 186.2p, HSBC rose 2.6p to 564.8p and Royal Bank of Scotland was ahead 5.7p at 227.3p.

Their performance was not enough to lift the FTSE 100 far on an otherwise quiet day. The index rose just 1.5 points to 5,834.5.

Michael Hewson, senior analyst at CMC Markets, said: “Markets continue to tread water in the vacuum of no new developments in the eurozone debt crisis.”

Retailers were boosted by a surprise 0.3 per cent rise in retail sales volumes between June and July, defying expectations of a slight fall, while June’s figures were revised upwards.

Tesco and Marks & Spencer were among the biggest risers, up 5.7p at 338.3p and 5.7p to 360p respectively.

African Barrick Gold was the biggest FTSE 250 riser with an 8 per cent gain – up 31.4p to 425p – as hopes of a takeover were raised on confirmation that its parent group was in talks to sell its 74 per cent stake in the London-listed miner to China National Gold Group.

NEW YORK: Wall Street rose tonight following comments from German Chancellor Angela Merkel that appeared to back the European Central Bank’s efforts to fight the eurozone crisis, while Cisco Systems jumped after it hiked its dividend.

The Dow Jones industrial average gained 67.80 points, or 0.52 per cent, to 13,232.58, the Standard & Poor’s 500 Index rose 7.62 points, or 0.54 per cent, to 1,413.15 and the Nasdaq Composite Index added 24.70 points, or 0.81 per cent, to 3,055.63.