US strength trumps banking woes

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The mighty US economy rode to the rescue of the British market for the third time in as many days yesterday, plucking the Footsie out of a slump caused by poor UK manufacturing figures.

The blue-chip index made gains even though London’s heavily weighted miners were dragged lower by poor Chinese factory data and state-backed banking duo Lloyds and RBS were punished for last year’s losses.

Toby Morris, senior sales trader at CMC Markets UK, said: 
“Equities have been dragged higher in afternoon trade on the back of bullish US macro data, as well as optimism over progress in sequester negotiations.”

London’s top-flight index closed up 17.8 points or 0.3 per cent at 6,378.6, reversing earlier losses after figures across the Atlantic showed US factory activity expanded in February at the fastest pace in 20 months.

Lloyds and Royal Bank of Scotland were among the biggest fallers, with RBS down 3 per cent or 9.9p to 314p after its 2012 results on Thursday showed losses of £5.2 billion.

Part-nationalised Lloyds was down 2 per cent or 1.2p to 53.3p as it posted losses of £570 million. Although the results were slightly ahead of City expectations, many investors booked profits following the recent strong run for the shares, pushing prices down 7 per cent at one point during the session.

Marketing and communications giant WPP enjoyed better fortunes, up 4p to 1,058p after its results showed profits rising to £1.5bn.

On the FTSE 250 index, William Hill topped the risers’ board after a jump of 10 per cent or 38.6p to 443.3p as traders cheered its decision to use an option to buy the 29 per cent stake of its online business it does not already own.

NEW YORK: Wall Street ended mostly higher last night as strong US economic data overshadowed growth concerns in China and Europe and let investors discount the impact of expected Washington spending cuts.

The Dow Jones industrial average closed up 35.17 points, or 0.25 per cent, at 14,089.66 while the Standard & Poor’s 500 Index was up 3.52 points, or 0.23 per cent, to end at 1,518.21. The Nasdaq Composite Index was up 9.55 points, or 0.30 per cent, to close at 3,169.74.