Banks and steelmaker help FTSE keep momentum
Investors in London held their nerve today as momentum seeped back into the markets following the worst month for more than three years.
The FTSE 100 Index dipped below the 5700 mark in early trading but gains by the banking sector and steel maker Corus saw it rebound to close the day up 25.9 points at 5749.7.
It followed a turbulent month in May which saw billions wiped off the value of blue chip stocks as the Footsie dropped 300 points lower following a lengthy bull-run stretching back to the start of the Iraq war in 2003.
Anglo-Dutch steel firm Corus grabbed much of the attention today after a media report in Russia said billionaire Chelsea FC owner Roman Abramovich was interested in buying a stake in the former British Steel company.
Corus shares have been bolstered this year by frenzied takeover speculation within the steel industry and shares lifted 7.25p to 398p today.
Banking giant Royal Bank of Scotland was also on the front foot after its stake in Bank of China soared in value following a bullish debut on the Hong Kong stock market for China’s number two lender.
RBS shares jumped more than 2% or 41p to 1765p, while rival high street bank Lloyds TSB gained 12p to 515.5p following an upbeat presentation to analysts in the Square Mile.
The positive sentiment spread through the sector with Alliance & Leicester up 25p to 1205p although HSBC lost 2p to 927.5p.
Norwich Union owner Aviva bucked the trend among insurers with a 7p fall to 735p as investors weighed up news that the company was looking for average sales growth of at least 10% over the next five years.
The strong gains from RBS, Lloyds TSB and Corus were not enough to beat fund manager Man Group to the top of the blue chip risers board. Man shares were 3% higher, up 81p to 2420p, following a strong set of results.
But further gains were prevented by heavy falls for miners which suffered on the back of weaker metal prices. Xstrata led the retreat, down 73p to 2057p, while Kazakhmys was off 38p to 1098p and Rio Tinto slipped 92p lower to 2871p.
Corporate news centred on the utilities sector after results from United Utilities and South West Water owner Pennon.
United Utilities presented a “very robust” set of figures according to one analyst with a 21% rise in profits.
The stock recovered from early losses to stand 7p higher at 667.5p, while Pennon moved 33p higher to 1301p after a performance in line with expectations.
The biggest blue-chip risers were Man up 81p to 2420p, Lloyds TSB 12p higher at 515.5p, RBS 41p up to 1765p and Severn Trent with a gain of 26p to 1152p.
The heaviest fallers were Xstrata off 73p to 2057p, Kazakhmys down 38p to 1098p, Rio Tinto 92p lower to 2871p and PartyGaming down 4p to 126p.
