END-OF-DAY REPORT: Headline shares ended the session sharply higher, with UK banks continuing to rebound despite Wall Street backing off opening highs driven by earnings from JP Morgan and economics data which came in ahead of expectations.
At the close of play, the FTSE100 was up 135.7 points at 5,286.3 with the FTSE250 ahead 305.2 points at 8,719.7 and the FTSE Smallcaps 55.1 points better at 2,629.8.
NEW YORK
As the London markets were closing, US shares, which surged on Wednesday, were up, but off earlier highs.
The Dow Jones Industrial Average was up 36.1 points at 11,275.4, having been up more than 100 points earlier. The S&P 500 was up 2.1 at 1,247.45. The Nasdaq Composite was 1.06 higher at 2,285.91.
LONDON MARKETS - BLUE CHIPS
Royal Bank of Scotland was a big winner, up 14.5p at 179.5p, while Barclays took on 23.75p to 290.5p, Lloyds TSB gained 16.5p to 300.5p and HBOS was 13.75p firmer at 268.25p, still below the 275p price of its rights issue, which closes Friday, and is likely to see underwriters left with the shares.
Asian-focused bank Standard Chartered was up 124p at 1,472p and HSBC was up 36.5p at 764.5p.
Midcap peer Bradford & Bingley was up 3.75p at 54p as shareholders approved its rights issue.
Cable & Wireless gained 3.8p to 159.4p, boosted by Lehman Brothers upgrading its recommendation to 'overweight' from 'equal-weight' with the price target raised to 200p from 190p.
On the downside, energy companies were hurt by the slide in crude prices in recent days. Brent For September delivery was trading at $135.56 a barrel midafternoon, down 25 cents and down $12 from last week's highs.
Tullow Oil was down 8.5p at 779.5p and Cairn Energy was 18p lower at 2,578p. Power generator Drax Group, also sensitive to oil prices, was a major casualty, down 39.5p at 714.5p.
MIDCAP NEWS
Strength was seen among housebuilders, after UBS lifted its recommendations on Bellway and Persimmon to 'neutral' from 'sell' following the collapse of share prices since April, with the shares making respective gains of 90.5p to 538.5p and 33.75p to 292p.
Taylor Wimpey, still rated 'neutral' at UBS, was up 8p at 40.25p, despite the broker cutting its price target to 38p from 90p.
Ashmore Group surged 28.5p to 232.5p, after the British emerging markets-focused fund manager said its assets under management rose 3% in the three months to June and its full-year results were in line with expectations.
Evolution Securities said the trading update was reassuring without exceeding expectations, noting that after the stock's 35% fall since the beginning of April, this should be enough to see a decent rally. The broker reiterated its 'buy' advice.
Mothercare gave up early gains to close even at 346.25p after reporting UK quarterly like-for-like sales rose 1% and total UK sales were up 19.5%. Total group sales were up 0.8% on a proforma basis.
Kaupthing said this was a good first-quarter statement and repeated its 'buy' recommendation.
Dairy Crest gained after its Q1 update in which it said it has performed in line with its expectations and its full-year expectations remain unchanged. Dairy Crest shares took on 35.25p to 391p.
Trinity Mirror continued to benefit from the statement it made on Wednesday, reassuring investors about its debt position and pension liabilities. The shares were up 13.25p at 73.75p.
SMALLCAP NEWS
IQE climbed 1.25p to 16p after the advanced semiconductor wafer products supplier said it expects first-half revenues and profits ahead of market expectations, boosted by continuing strong growth in the high speed wireless markets.
Inland ticked up 0.5p to 14.25p pence after the company, which specialises in buying brownfield sites, said its full-year results are in line with market expectations.
Story supplied by MoneyAM
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