WEDNESDAY MARKET CLOSE: Bank minutes aid financials

Financial stocks and firms focused on the UK market were in demand after the Bank of England took an upbeat view of recovery prospects.

Michael Hewson, senior analyst at CMC Markets, said: “Financials were initially amongst the best performers, with Lloyds Banking Group leading the banks higher and HSBC and Standard Chartered not too far behind after the Bank of England’s latest minutes emphasised a positive shift in tone in respect to the health of the UK economy.”

HSBC gained 2.6p at 695.5p, Lloyds climbed 1.6p to 76.25p, and Standard Chartered was up 20.5p at 1,514p. Tesco was also buoyed by the better economic picture painted by the minutes, with shares up 6.9p at 378.3p.

Shares in Barclays, trading for the first time without rights to participate in its £5.8 billion fundraising at 185p a share, were down more than 7 per cent at 277.2p. But brokers said the figures indicated a positive take-up of the new stock by the City.

Aberdeen Asset Management was the next biggest blue-chip faller, slipping 13.2p to 367.3p after being on the end of a price target downgrade by Morgan Stanley.

The FTSE 100 closed lower, despite a positive morning, as traders took up defensive positions ahead of the Federal Reserve’s announcement. The index was down 11.35 points at 6,558.82.

Chipmaker ARM Holdings surged 3.2 per cent amid rumours that it is a takeover target for US giant Intel. The shares, which also enjoyed a target price upgrade from stockbroker Bernstein, added 30.5p at 984p.

Another riser was Smiths Group after the scanner maker announced a special dividend as well as increasing its full-year payout by 4 per cent. The shares firmed 36p or 2.6 per cent at 1,412p.