Banks Lead Buoyant FTSE

Dominic Turner
shareprices.com - Friday, March 19, 2010

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Lloyds Banking Group

The Dow Jones Industrial Average made a modest gain of 45.5 points or 0.42% to 10,779.17 overnight, in so doing, posting its eighth consecutive gain. This, in turn, renewed risk appetite amongst investors, who spurned traditionally defensive stocks, such as utilities, in favour of more exciting financial stocks.

The FTSE 100 index made a strong start, gaining 32.20 point or 0.57% to 5,674.82 during morning trading, with banks the focus of attention. Part-nationalised lender Lloyds Banking Group, 41% owned by the British taxpayer, was the leading light in the sector, gaining 5.14p or 9.25% to 60.69p. Lloyds released an impromptu trading statement in which it said that bad debt charges in the first 10 weeks of 2010 had been lower than expected and it expected to be profitable on a combined basis in 2010;CEO Eric Daniels described trading in the first 10 weeks of the year as "strong".

Lloyds was joined on the risers' board by Royal Bank of Scotland (RBS), which rose a healthy 2.5p or 5.95% to 44.5p and Barclays, up 7.55p or 360.45p. RBS' CEO Stephen Hester, who waived a £1.6 million bonus last year, could reportedly receive a bonus of nearly £5 million under a new bonus scheme.

Friday morning's losers included utility groups Centrica, down 3.84p or 1.29%, Scottish and Southern Energy, down 8.02p or 0.72% to 1,108.98p and Severn Trent, down 1p or 0.08% to 1,214p. Centrica had previously made good gains after Nomura raised its target price for the stock from 340p to 370p earlier in the week.

 

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