Markets: Happy investors bank Lloyds shares

BANKS were in demand on Tuesday after robust first-quarter numbers from part state-owned Lloyds while stronger-than-expected US manufacturing data also gave the London market a much-needed boost. Shares in Lloyds leapt more than 8 per cent, or almost 2.6p, to 33.59p after it reported a £288 million pre-tax profit for the three months to the end of March, significantly better than results from a year ago.

The news helped push Royal Bank of Scotland – due to update on trading this Friday – up 4.2 per cent to 25.3p, while rival Barclays gained 3.6 per cent at 226.2p.

The benchmark FTSE 100 index closed up 74.45 points, or 1.3 per cent, at 5,812.23, ending above the 5,800 level for the first time since 3 April.

Growth in the manufacturing sector across the pond picked up unexpectedly in April, while new orders gained, Institute for Supply Management data showed. It contrasted with a downbeat assessment of UK manufacturers’ prospects earlier in the session.

Chris Beauchamp, market analyst at IG Index, said: “Today’s US data helped to shake off some of the wariness among investors.”

Imperial Tobacco was also among the biggest risers after it reported encouraging momentum in revenues over the second quarter. With half-year profits 3 per cent higher at £1.5 billion, shares were up 92p, about 4 per cent, to 2,556p.

Retailers Next and Marks & Spencer were down 33p to 2,896p and 0.7p to 357.7p respectively amid fears the recent bad weather has washed out high street sales.

BP’s shares were 3.7p lower at 441.3p after it announced profits of $4.8 billion (£3bn) in the first quarter, compared with the $5bn expected by City analysts.

NEW YORK: The Dow closed at its highest level in more than four years on Tuesday night after US manufacturing expanded at a faster pace than expected in April, easing jitters about a slowdown in the economic recovery.

The Dow Jones industrial average was up 65.77 points, or 0.50 per cent, to end at 13,279.40 while the Standard & Poor’s 500 Index was up 7.92 points, or 0.57 per cent, to finish at 1,405.83. The Nasdaq Composite Index closed up 4.08 points, or 0.13 per cent, at 3,050.44.