Markets: Boost for banks but FTSE edges down

AN UPBEAT note from Goldman Sachs boosted the banking sector and helped limit losses for London’s leading shares index.

The US broker upgraded its rating for the European banking sector following the cheap loans bonanza from the central bank. It added that it now expects the FTSE 100 Index to hit 6,200 in six months’ time, up from its previous estimate of 6,000.

But the Footsie showed little sign of going anywhere fast yesterday, eventually closing 0.3 per cent down at 5,911.13. Yusuf Heusen, sales trader at IG Index, said: “It seems that most of the City has opted for an early finish this week, with an almost palpable sense of tedium pervading markets.”

Analysts were comfortable with the revelation from Barclays that it tapped €8.2 billion (£6.8bn) of the ECB’s cheap loans this week. Shares were 5.6p higher at 256.8p, while HSBC added 0.7p to 569p. Royal Bank of Scotland was up 0.3p to 28p, with Lloyds Banking Group ahead 0.9p to 35.6p.

Shares in Parkmead, the Aberdeen-based oil and gas explorer headed by Dana founder Tom Cross, leapt nearly 20 per cent despite the fact that the company is not poised to make any announcements. It gained 3.62p at 22.25p.

The sector has been rife with takeover rumours recently, with Edinburgh-based Bowleven one of the apparent targets. The firm said there would be no bid from supposed suitor Dragon Oil earlier this week, sending shares tumbling, but yesterday they found support and climbed 4 per cent to 96.5p.

Shares in Weir Group were up 4p at 2,034p as Danish firm FLSmidth lodged a “contra-appeal” against the Scottish company’s appeal to Australian takeovers panel in the battle to buy Australian miner Ludowici.

New York: On Wall Street, the S&P 500 and Nasdaq notched their eighth week of gains in the last nine, but momentum ran out last night as shares ended the day lower after a thinly traded session.

The Dow Jones industrial average dropped 2.73 points, or 0.02 per cent, to end at 12,977.57 while the broader Standard & Poor’s 500 Index shed 4.46 points, or 0.32 per cent, to finish at 1,369.63. The Nasdaq Composite Index fell 12.78 points, or 0.43 per cent, to close at 2,976.19.