UK shares rose yesterday, buoyed by gains for heavyweight banks as the sector tracked continental peers on expectations Spain was moving closer to asking for a bailout.
A 12.29 point, or 0.2 per cent, move higher to 5,805.61 points was not enough to take the FTSE 100 out of its recent tight trading range, however, and the index remained a regional laggard in comparison to gains in Germany and France.
While traded volumes were towards the top of their recent range, at 90 per cent of their 90-day daily average, absolute volumes remained low, traders said.
“Markets are paper thin at the moment. There isn’t any conviction in their moves,” said Zeg Choudhry, head of equities trading at Northland Capital Partners.
That lack of conviction has kept the FTSE in a tight 47 point range since the start of October, flirting with the trendline formed by the index’s lows in June and August.
British banks led sectoral gainers, up 1.3 per cent, after a Reuters report that Spain could apply for a bailout in November supported sentiment towards the sector, adding to a solid third quarter rally.
HSBC, up 0.9 per cent, added nearly four points to the broader index, while peers including Barclays and Lloyds Banking Group also rose. The sectoral performance was marred only by a one per cent fall for Royal Bank of Scotland, hit after Spanish bank Santander withdrew from a deal to buy 316 branches from the UK lender late on Friday.
The FTSE 100 has added 5.6 per cent since late July, against 7.9 per cent for the FTSEurofirst 300 and 15.1 per cent for the Euro STOXX 50.