Newspaper article The Evening Standard (London, England)

Footsie Aims for a Fifth Day of Advances in a Row

Newspaper article The Evening Standard (London, England)

Footsie Aims for a Fifth Day of Advances in a Row

Article excerpt


SHARE prices were steering a course for their fifth consecutive day of gains on the London stock market today. If they were to achieve that goal, it would be the first time so far this year, and would bring much-needed cheer and stability to frazzled City investors.

The prospect of another cut in interest rates, of as much as half a point, later this week and opening gains on Wall Street this afternoon, provided a positive backdrop to sentiment. The FTSE 100 index traded nervously but still managed to get its nose in front with a rise of 15.8 at 4393.2.

The wider FTSE 250 index was up 173.9 points at 6456.5. But it was a nervous affair, and by midday a meagre 400 million shares had changed hands, highlighting the chronic stock shortages among second-liners.

"There really isn't much to cheer on.

There is no guarantee that even if the Bank of England cuts rates the benefits will be passed on by the retail banks," said a trader.

The early focus of attention was on the banks following news of further big writedowns at Lloyds TSB, down 7.3p at 190.5p, and HBOS, up 4.1p at 103.4p.

Lloyds has confirmed that its takeover of HBOS will go ahead despite talk of a counterbid. Barclays, which turned its back on the Government's offer of fresh funding, fell 8.9p to 170p. UBS has slashed its target price from 220p to 170p and has repeated its neutral rating. The broker points out existing shareholders will be heavily diluted by the funding programme, but funding through the Government would have been incompatible.

Royal Bank of Scotland, which is borrowing a further [pounds sterling]20 billion from the Government, slipped 2.8p to 64.7p which means its rights issue, priced at 65.5p, is under water.

It was left up to the miners to make the running among blue-chips. Kazakhmys led the way with a rise of 45p to 3301/2p. Dealers say the shares were oversold last week and are now having to do some catching up. Vedanta Resources is another miner that has been heavily sold in recent months.

Today the price bounced 86p to 936p.

BT Group rallied 0.2p to 114. …

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