A RECOVERY in beaten-down financial stocks pushed Britain’s benchmark share index higher yesterday, although volumes were thin, indicating a lack of conviction in the rally due to fears over the Eurozone debt crisis and the weak global economy.
The blue-chip FTSE 100 index closed up 0.7 per cent, or 36.74 points, at 5,664.07 points, recovering from two consecutive days of losses that took more than 1.1 percentage points off the index.
Trading volumes, however, were thin as many chose to stay on the sidelines due to persistent fears over the Eurozone crisis and the weak economic backdrop. Volumes for the FTSE 100 came in at 66 per cent of their average 90-day volume.
Prudential topped the FTSE 100 leaderboard, rising 3.3 per cent. Rival insurer Legal & General rose 2.1 per cent, while the FTSE 350 banking sector gained 1.3 per cent.
“Financials have generally been stronger across the board today, and Prudential’s benefiting from that,” said Central Markets chief strategist Richard Perry.
British engineer GKN and aerospace group BAE also featured prominently on the FTSE’s leaderboard, rising 3.3 and 2.7 per cent respectively on expectations of contract wins at this week’s Farnborough air show.
The FTSE 100 has remained above the 5,600 level since breaking above that mark at the end of June, but has failed to stay above the 5,700 level after having reached an intraday high of 5,727.45 points on 5 July.