Markets: Bargain hunting helps lift RBS shares

Royal Bank of Scotland topped the FTSE 100 risers’ board yesterday as investors got behind a Europe-wide rally and bought into the sectors hardest hit by the recent sell-offs.

Michael Hewson, senior analyst at CMC Markets, said the bounce came on the back of bargain hunting as well as some optimism that today’s EU summit would yield a positive response to the eurozone’s problems.

“Recent history doesn’t augur well but for the time being, given the oversold nature of the markets, some form of bounce back is welcome,” he said.

The FTSE 100 Index gained 98.8 points, or nearly 2 per cent, to 5,403.3, with similar gains seen in Germany and France.

RBS was 5.5 per cent higher at 21.95p, while Barclays added 5 per cent at 188.9p.

Commodity-related firms were back in favour as China gave further hints that it would put aside worries about inflation and raise spending on infrastructure to boost its resource-hungy economy. Weir Group was the biggest beneficiary as the Scottish pumps and valves maker gained more than 5 per cent to 1,582p. Among ascendant miners were Antofagasta and Rio Tinto, both up more than 4 per cent at 1,076p and 2,936.5p respectively.

Outside the top flight, Homeserve plunged 29 per cent after the home repairs group revealed it is being investigated by the City watchdog in the wake of accusations over mis-selling and failures in complaints handling. The Walsall-based group saw shares fall 66.5p to 160.9p.

On Aim, shares in Aberdeenshire-based oil firm Xcite soared by almost 20 per cent as rumours circulated on bulletin boards that the company would make a significant announcement at its annual meeting tomorrow. Its shares were 17p higher at 105p.

New York: After Monday’s bounce, Wall Street closed mostly flat last night after a volatile late-day period, with weakness in material and energy shares offsetting strength in financials.

The Dow Jones industrial average dipped 1.82 points, or 0.01 per cent, to end at 12,502.66 while the broader Standard & Poor’s 500 Index inched up just 0.64 of a point, or 0.05 per cent, to finish at 1,316.63. The Nasdaq Composite Index slipped 8.13 points, or 0.29 per cent, to close at 2,839.08.