Banks bolster FTSE at the close

London stocks struggled to gain ground today as poor economic data on both sides of the Atlantic dismayed investors.

A rally led by banking stocks late in the afternoon helped push the FTSE back into the black, with the FTSE 100 just 0.2 per cent higher at 5,870.14 at the close.

Miners made muted gains but failed to push the index either up or down, while a lack of company news left the market without major momentum.

Banks shook off the ongoing eurozone debt fears to gain places among the top risers as investors bet that they were oversold yesterday, when their bailouts and Greece’s looming debt default spooked the market.

Barclays was most popular, and closed up 2.3 per cent at 271.8p, with RBS and Lloyds also each up two per cent at the close. Standard Chartered also rose 1.8 per cent to close at 1,595p.

Retailer Marks & Spencer regained some of its losses yesterday, finishing 1.8 per cent higher at 392.6p.

But Next, International Power and Amec all fell after going ex-dividend.

"There's not an awful lot to look forward to at the moment," said Yusuf Heusen, senior sales trader at IG Index.

On the FTSE 250, Cable & Wireless was sold off, closing 11.7 per cent down at 42.41p after its full-year results showed it expected ongoing weakness in its Caribbean division.

Sports Direct also suffered, and closed down 5.5 per cent at 215p, after its peer JJB Sports reported an £181m pre-tax loss in the past year.

US markets opened low and lost ground after new data showed that orders for durable goods such as refrigerators fell 3.6 per cent month-on-month in April, worse than economists’ consensus expectation of 2.5 per cent.

However, a separate dataset showing that house prices fell less than expected in March buoyed the market, and stocks gained ground in the day’s trading.

Sentiment has also returned after three consecutive sessions of selling in the market, which created investor appetite for undervalued stocks.

Insurer AIG fell give per cent, the day after the US government sold 200m shares, as investors priced in the future impact of the sale of its remaining 1.5bn share stake.

Retailers also slumped, with Collective Brands down by 15 per cent after it reported profits that fell 48 per cent below expectations.

Clothing chain Express also lost 12 per cent after it issued second-quarter forecasts below analyst predictions; and Polo Ralph Lauren lost nine per cent after it released quarterly results.

The Dow Jones industrial average finished up 38.45 points, or 0.31 per cent, at 12,380.43. The Standard & Poor's 500 Index was up 4.19 points, or 0.32 per cent, at 1,319.03. The Nasdaq Composite Index was up 15.22 points, or 0.55 per cent, at 2,761.38.