UK banks drive cau­tious gains ahead of Euro­pean Cen­tral Bank

The Pak Banker - - Front Page -

LONDON: London eq­ui­ties traders turned their at­ten­tion to Frank­furt on Thurs­day in the hope that the Euro­pean Cen­tral Bank would ex­tend its bond pur­chase scheme to soothe strained sov­er­eign credit mar­kets.

Fi­nan­cial stocks con­tin­ued to re­cover on hopes of news of fur­ther stim­u­lus mea­sures af­ter the ECB's mon­e­tary pol­icy meet­ing ends later in the ses­sion.

Among the sec­tor's best per­form­ers, Royal Bank of Scot­land rose 0.7 per cent to 40.2p, while Lloyds Bank­ing Group was 1 per cent higher at 64.6p.

Bar­clays bucked the trend af­ter news it was among the biggest users of the emer­gency credit fa­cil­i­ties pro­vided by the Fed­eral Re­serve at the height of the fi­nan­cial cri­sis. Shares in Bar­clays were 0.8 per cent weaker at 265.9p.

Re­source stocks also re­mained in de­mand af­ter the strong man­u­fac­tur­ing data over the pre­vi­ous ses­sion left them look­ing un­der­val­ued fol­low­ing Novem­ber's steep sell-off. Adding im­por­tant sup­port for the mar­ket's vul­ner­a­ble ad­vance Rio Tinto was the best sin­gle per­former on the FTSE 100, ris­ing 2.5 per cent to £43.13.

Over­all, London's bench­mark in­dex was 0.2 per cent higher at 5,654.01, a gain of 11 points. It came af­ter the best one-day gain in three months dur­ing the pre­vi­ous ses­sion, af­ter stronger UK man­u­fac­tur­ing data than fore­cast added to the ebul­lient mood gen­er­ated by strong Chi­nese data.

Britvic shares came un­der heavy pres­sure as in­vestors looked dis­ap­pointed with the size of its div­i­dend. The soft drinks maker lifted its fi­nal pay-out by 111.3 per cent to 12p per share, but hopes for a big­ger in­crease were left un­ful­filled. The stock lost 7.9 per cent to 38.9p.

Rolls-Royce fell 1.2 per cent to 611p as the prob­lems with its en­gines on Qan­tas's Air­bus A380 su­per jum­bos con­tin­ued to haunt the stock. The Aus­tralian air­line was re­ported to be con­sid­er­ing su­ing the Derby-based en­gi­neer un­less the two par­ties reached a deal over the mount­ing costs of the prob­lems on its fleet. King­fisher, par­ent com­pany of the B&Q home im­prove­ment stores, rose 0.8 per cent to 239.7p af­ter its third-quar­ter num­bers were not as bad as some an­a­lysts had feared. Re­tail profit at the com­pany rose 5.9 per cent.

Caro­line Gul­liver, an­a­lyst at Ex­e­cu­tion Noble, said: "King­fisher's 3Q re­sults are over­all in-line with ex­pec­ta­tions. the long-term growth op­por­tu­ni­ties at King­fisher re­main strong." But there were grow­ing con­cerns about the po­ten­tial im­pact of the bout of se­vere weather in the UK on the peak Christ­mas shop­ping sea­son, lead­ing to pres­sure on re­tail and leisure stocks.

"The con­cern for re­tail­ers, restau­rants, bars and ho­tels is that this could se­ri­ously hit their trade in their most im­por­tant time of the year," said Howard Archer at IHS Global In­sight. - PB News

LA­HORE: Chief Min­is­ter Pun­jab Mian Shahbaz Sharif vis­it­ing the stalls dur­ing 3rd In­ter­na­tional Foundry Con­fer­ence at a lo­cal ho­tel. -On­line

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