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FTSE continues to slip as banking fears hold sway
Stocks endured another turbulent day on the London market yesterday in spite of a co-ordinated $180bn (£98.7bn) effort by central banks to help restore confidence.
Fears of further banking rescues in the US reversed an earlier share rebound, with news of Lloyds TSB's 12.2bn takeover of Halifax Bank of Scotland (HBOS) failing to sustain gains in London. The FTSE 100 Index, which had risen more than 1.8 per cent at one stage, closed the day down 32.4 points at 4880.0.
Early session gains on Wall Street also fell back in spite of President George Bush's pledge to "continue to act to strengthen and stabilise financial markets".
Attentions were turning to other US banks seen as being at risk, with Morgan Stanley shares down 21 per cent on reports it was seeking a rescue deal.
Across Europe, markets were mixed after the central banks' move – which included some $40bn from the Bank of England.
The CAC 40 in France closed down 1 per cent, while Germany's Dax held in positive territory by just 2.4 points.
In London stronger mining and retail stocks helped to limit losses. Investors also digested details of Lloyds TSB's rescue of HBoS which ended uncertainty over the future of Britain's biggest mortgage bank.
The confirmation caused HBoS to rally towards the 232p a share offer price, up 17 per cent or 251/2p at 1725/8p. However, Lloyds TSB shares were the subject of volatility, ending the day down by 15 per cent or 421/4p at 2371/2p. Worries that another US bank could succumb to the credit turmoil sent other banks down. Barclays, which had benefited from news that it is to take over some Lehman Brothers assets, later slipped another 5 per cent, down 163/4p to 301p.
Unexpectedly strong retail sales figures, showing a 1.2 per cent rise last month helped to boost Marks & Spencer and Next, which were ahead by 51/4p to 232p and 40p to 1112p, respectively.
B&Q owner Kingfisher also offered some welcome cheer as it reported a far higher than forecast 23 per cent rise in underlying interim pre-tax profits. Shares rose 10 per cent, or 115/8p to 1313/8p.
Miners offered a marginal lift, as did higher oil prices after investors switched out of equities and into crude, pushing the New York price to near $100 a barrel.
Vedanta Resources climbed 47p higher to 1432p, while energy firms Yorkshire-based Drax and BG Group gained 78p to 8031/2p and 8p to 1036p, respectively.
Norwich Union-parent Aviva gained for a second successive session after Wednesday's estimate of its exposure to Lehman and AIG eased investor concerns. Shares were ahead 221/4p to 4773/4p, while Friends Provident lifted 4.4p to 85.5p.
Biggest Footsie risers were HBoS, up 251/2p to 1725/8p, Drax Group, ahead 78p to 8031/2p, Kingfisher, up 115/8p to 1313/8p and London Stock Exchange, up 571/2p at 790p.
Biggest Footsie fallers were Old Mutual, off 123/4p at 69p, Lloyds TSB, down 421/4p at 2371/2p, British Airways, fell 261/4p to 217p and Man Group slipped 373/4p to 4051/4p.
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Weather for Yorkshire
Sunday 12 February 2012
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