Financial shares buoy FTSE 100

The blue chip index edged up in early trading, but failed to replicate strong gains overnight in Asia.

Resources and financial shares were in favour this morning, with oil and gas services provider Petrofac the top FTSE 100 riser. Eurasian Natural Resources was up 1.58 per cent, as Credit Suisse upgraded the stock from “neutral” to “outperform”, raising its target price for the miner.

Banking issues also buoyed the index, with Lloyds Banking Group up 1.85 per cent in early deals, followed closely behind by RBS, up 1.6 per cent. HSBC rose by a modest 0.02 per cent, while Barclays added 0.13 per cent.

Asset manager Schroders was also up by 1.59 per cent, as JP Morgan raised its target price for the stock.

Airline Flybe and holiday group Thomas Cook were outperformers on the FTSE All-Share this morning, rising 6.63 per cent and four per cent respectively.

At the other end of the spectrum, engineering shares led the main index down, with oil services company John Wood Group losing 1.25 per cent.

Temporary power solutions firm Aggreko, whose shares tumbled last month on a profit warning, lost one per cent in early trading.

Explorer Tullow Oil, which released a mixed trading update on Friday, continued its losses and shed just under one per cent in early deals this morning.

Meanwhile on the FTSE All-Share, management and insurance support services company Charles Taylor lost 5.5 per cent.

Exillon Energy, which this morning granted a general meeting to shareholder Worldview Capital Management, lost 2.7 per cent. The shareholder is seeking to remove the firm’s chairman to turn around a slide in the share price.

Asian markets made strong gains overnight. In Japan, the Nikkei closed 1.4 per cent up, while in Hong Kong the Hang Seng was 0.64 per cent up. In the US, the Dow Jones closed 0.13 per cent up.