SOON-TO-BE banking partners HBOS and Lloyds TSB saw their shares race ahead yesterday, but their gains failed to halt a near 2 per cent slide for the FTSE 100 index.
HBOS and Lloyds rose 15 per cent and 5 per cent respectively, following big jump
s for both groups on Wednesday, as another big institutional investor in both firms backed the Lloyds TSB-HBOS tie-up.
However, plunging oil and metal prices saw heavyweight energy and mining stocks come under pressure and the Footsie closed down 89.3 points at 4,870.3.
Opening falls for New York's Dow Jones Industrial Average added to the jitters, with US investors concerned about the government's $700 billion banking bail-out. More gloomy US economic data also weighed heavy on stocks on both sides of the Atlantic.
HBOS was the Footsie's leading riser – up 22p to 170.1p – as investment giant M&G added its backing to last month's original takeover announcement by Lloyds TSB. Lloyds gained 12p to 262p. Other banks were not so fortunate, with Barclays down 3p to 338p and Royal Bank of Scotland 4p lower at 176p.
Marks & Spencer was another big riser in a stronger session for retailers, despite the high street giant unveiling a 6.1 per cent drop in like-for-like sales during the 13 weeks to 27 September.
The performance was better than expected, and coupled with plans to shave more than £100 million off investment plans that were well-received by analysts, M&S's shares rose 8 per cent, or 17p to 227.25p.
Retailers were also helped by fast-growing hopes of an interest rate cut next week as economic gloom deepens.
Clothing chain Next was in better shape, up 40p to 1,099p, while building materials giant Wolseley rose 3p to 404p.
Bicycle and car parts retailer Halfords joined the retail rally in the FTSE 250 Index after displaying its defensive qualities with a solid sales performance for the 13 weeks to 26 September. Its shares jumped 16p to 272p.
Currys owner DSG International shared in the positive sentiment with a rise of 2.25p to 49.25p, while pubs chain JD Wetherspoon added 8.25p to 252.25p.
Directories firm Yell surged in the second tier, improving12 per cent or 9.5p to 90p. Analysts said the rise reflected hopes that a debt refinancing was on the cards.
Back in the top-flight, losses for heavyweight miners and energy firms dragged the index down. Oil fell more than $4, with gold down more than $40 or 5 per cent.
Vedanta Resources was the leading Footsie faller – down 13 per cent or 123p to 912p – in the wake of a Goldman Sachs downgrade. Oil prospector Tullow Oil fell 72.5p to 638.5p, while Edinburgh-based Cairn was one of the FTSE's biggest fallers – down 204p at 1,890p.
But British Airways was flying high, up 4.6p to 178.1p.
The full article contains 509 words and appears in The Scotsman newspaper.
