London Stock Exchange’s leading index and other markets across Europe made tentative gains as EU leaders continued with plans for treaty changes without David Cameron.
The prime minister had earlier effectively used his veto on a “fiscal compact” to cap the eurozone debt crisis, so the 23 nations that have agreed a general commitment to bring in stricter economic sanctions are now pressing on. However, there was little in the way of concrete signs of progress from the EU summit in Brussels.
Ben Critchley, a sales trader for IG Index, said Cameron’s refusal to embrace an EU-wide financial transactions tax had helped sentiment in the City. But Critchley warned the financial sector remained vulnerable after a number of European banks were downgraded.
London’s FTSE 100 Index was marginally ahead at 5488.15 during afternoon trading following an uncertain start to the day, but Asian stocks dropped by more than one per cent. Frankfurt’s Dax went up by almost two per cent, while Paris’ Cac40 rose by one per cent. Analysts believe investors are waiting for more details to emerge from the summit before deciding if they are going to alter their position.
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Banks’ share prices recovered some of the ground lost on Thursday when the European Banking Authority said continental banks had to fill a gap of £114.7bn to reach new minimum levels of capital.
Ratings agency Moody’s downgraded three of France’s biggest banks because of the eurozone debt crisis, but British banks performed well. Barclays went up 10.6p to 191p, a rise of six per cent, while shares in Royal Bank of Scotland increased by 1.3p to 21.2p. Lloyds Banking Group went up by 1.7p to 26.8p.
The London market was also boosted by miners. Fresnillo went up by 62.5p to reach 1791.5p, while Eurasian Natural Resources went 22.5p higher and hit 688.5p. Xstrata increased by 34p to 1024p.
Shares in Bellway went up by five per cent after investors were given a double helping of good news. The housebuilder’s revenues went up 14 per cent as the company described its market as “remarkably resilient”, while it also had an expected five per cent improvement in sale completions for its financial year’s first half. Bellway also agreed £150m new lending facilities with Lloyds Banking Group, helping its shares go up by 32.5p to 761p.
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