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FTSE 100 nudges higher as banks start to look oversold

<!--StartFragment--> THE FTSE 100 edged up by 0.7 per cent yesterday, snapping a three-day losing run, with gains in banks and miners offsetting weakness in oil producers hurt by weaker crude prices. The index closed 31.21 points higher at 4,362.58 in a choppy session.<br /><br />&ldquo;It still looks too early to predict the end of this two month recovery,&rdquo; said David Jones, chief market strategist at IG Index. &ldquo;The 4,300 mark has underpinned any weakness and although the flow of &lsquo;green shoots&rsquo; type of news has stopped in recent days, a run back up to the 4,500 mark for the index looks entirely possible.&rdquo;<br /><br />Banks were the top sectoral gainer after falling sharply in the previous session. <strong>Barclays</strong> surged 4.2 per cent after Morgan Stanley upgraded the lender to &ldquo;overweight&rdquo;.<br /><br /><strong>HSBC, Lloyds Banking Group, Royal Bank of Scotland</strong> and <strong>Standard Chartered </strong>were up between 1.7 per cent and 8.1 per cent.<br /><br />Miners were firmer as silver miner <strong>Fresnillo </strong>and gold miner <strong>Randgold Resources</strong> added 11.7 and 3.6 per cent respectively, supported by strength in precious metal prices.<br /><br /><strong>Eurasian Natural Resources, Vedanta Resources, Rio Tinto, Kazakhmys </strong>and <strong>Xstrata</strong> were up between 2.5 per cent and 5.3 per cent.<br /><br />Oil producers, on the other hand, were the main drag on the index. <strong>BP, Royal Dutch Shell, Cairn Energy </strong>and <strong>BG Group </strong>slipped 0.4 per cent to 2 per cent.<br /><br />&ldquo;We won&rsquo;t see the lows of March again but there is short-term worry over the health of the global economy,&rdquo; said Jeremy Batstone-Carr, head of private client research at Charles Stanley. &ldquo;There&rsquo;s a very active debate going on between pessimistic bond traders who feel there maybe a need for more stimulus and the more positive equity traders who feel the worst is behind us.&rdquo;<br /><br />On a busy day for corporate results, <strong>BT Group</strong> sank 6.4 per cent after it cut its dividend and said a further 15,000 jobs would go.<br /><br /><strong>Invensys</strong> soared more than 13 per cent after beating expectations on operating profit and resuming the payment of a final dividend.<br /><br /><strong>Balfour Beatty </strong>was also higher, up 3.6 per cent after it forecast further progress in 2009 overall after its performance in the building sector exceeded that of last year.<br /><br />Tour operator <strong>Thomas Cook</strong> shed 7.3 per cent, despite saying it was confident of meeting full year expectations as summer holiday bookings for 2009 remained robust even as economic conditions were tough.