BRITAIN’S leading share index ended higher yesterday after positive US retail sales data and narrow gains for defensive shares more than offset another slide in banking shares on concerns about Spain.
Pharmaceuticals and utilities – sectors that are less exposed to swings in the economic cycle – drove the index higher, with GlaxoSmithKline providing the biggest individual support, adding five points to the index.
The FTSE 100 index closed up 0.3 per cent.
Gains in defensive shares were checked slightly by the weaker performance of UK banking stocks. They were dragged down by a jump in Spanish debt yields, which rose above six per cent, their highest level since November, on worries about Spain’s ability to cut its deficit.
As a result of those jitters, UK financials proved the biggest drag on the broader index, with Royal Bank of Scotland shedding more than two per cent.
Lloyds Banking Group was the biggest loser, however, dropping more than three per cent. In addition to the Eurozone concerns, it was hit by reports the Co-op is close to abandoning a £1.5bn bid for 632 Lloyds bank branches.
The market was awash with news of dealmaking, led by British power generator International Power.
The British firm led gains for the day, rising 3.2 per cent on its highest volume this month, after French utility GDF Suez agreed to buy the 30 per cent of International Power it does not already own for £6.8bn.
M&A issues also clipped 2.1 per cent off International Airlines’ share price. Sir Richard Branson’s Virgin Atlantic airline is set to appeal against what it claims was Brussels’ “lightning speed” approval last month of the contentious takeover of BMI British Midland by International Airlines Group, the parent company of British Airways.