FTSE ends with strong gains as the banks and miners shine
END-OF-DAY REPORT: Headline shares closed the session out with strong gains as banks reacted favourably to the latest Basel pronouncement, and miners made hay as new data suggested a surge in demand in China.
At the close of business, the FTSE100 was up 63.89 points at 5,565.53 with the FTSE250 ahead 106.55 points at 10,508.33 and the FTSE Smallcaps 33.42 points better at 2,916.87.
In London, the main topic of conversation in the City was the weekend’s agreement with the Basel Committee raising banks capital requirements.
Banks will have to triple their levels of reserves under the new rules which will be introduced between 2015 and 2018.
With the new rules considered more benign than feared in many quarters, especially the timetable for change, Lloyds led the UK banks higher, rising 1.99p at 77.61p.
Royal Bank of Scotland added 1.14p at 49.67p and Barclays rose 4.6p at 323.7p.
Insurers were also in demand, with Prudential heading a focus after weekend press reports that a Chinese consortium is considering a bid.
Pru shares jumped 18.5p at 618p, while Legal & General rose 2.8p at 100.5p and Aviva improved 4p at 413.3p as sector consolidation chatter increased in volume.
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Mining shares were boosted by news of growing demand in China, with Kazakhmys topping the leaderboard, up 67p at 1,352p. Xstrata gained 34.5p at 1,170p, Vedanta Resources gained 71p at 2,109p and Rio Tinto rose 89.5p at 3,619.5p.
Reports of accelerated plans by Tesco for Asia expansion drove the shares up 3.6p at 422.2p. Sainsbury added 5.1p at 382.4p and Morrisons gained 3.6p at 295.1p.
BAE Systems rose 10.2p at 333.1p on confirming it has engaged Wells Fargo and JP Morgan to advise on strategic options with regard to its US Platform Solutions business, including a possible sale.
Other significant gainers included builders’ merchant Wolseley, up 69p at 1,450p after glowing words and an overweight rating at Morgan Stanley, software house Autonomy, ahead 29p at 1,802p as bid interest rumours refuse to go away, and aero-engine maker Rolls-Royce, 10p higher at 595p.
