Banking shares lead FTSE as debt in Eurozone makes UK a safe haven

BRITAIN’S FTSE 100 finished flat but outperformed European stocks yesterday, led by a financials sector that bucked the broader European trend as investors sought refuge from Eurozone debt distress.

Financials, the broad sector which includes banks, insurers and asset managers, added 9 points to the FTSE 100 and ensured the blue-chip bourse finished in positive territory.

The solid gains, which resulted in Lloyds Banking Group adding 3.5 per cent and Barclays two per cent, also helped the STOXX Europe 600 Banking index to close up 0.1, as they were able to offset a 0.5 per cent fall in Eurozone banks index.

The Greek parliament passed an austerity budget for 2013 late on Sunday, but the EU said it was not ready to authorise a new loan tranche yesterday, maintaining a position first staked out last week.

However, Athens was set to get two more years to achieve a primary budget surplus.

The FTSE 100 closed down just 2.41 points, or 0.04 per cent, at 5,767.22, opening the week steady after losing 1.7 per cent last week and outpeforming a 0.2 drop in the top European stocks.

Banks aside, there was little evidence that the appetite was there among investors to propel riskier stocks – those which tend to rise more when economic condition improve and fall more in times of economic distress – higher.

Miners shed 0.7 per cent as the uncertainty in the Eurozone mixed with weak GDP data from Japan to take the sheen off slightly better trade data from China. Platinum producer Anglo American lost two per cent, the top faller in the FTSE 100.