LONDON shares held firm in positive territory yesterday for the third session running as soaring commodity prices and more cheer in the US banking sector boosted blue chips.
The benchmark FTSE 100 index closed 27.9 points higher at 5,404.3 as bett
er-than-expected earnings data from Bank of America kept bank stocks on the boil.
Miners also littered the risers board on higher commodity prices, although it was another mixed session for the Footsie.
The top share index saw a 40 point slump in early trading, with sentiment soured by news of a poor take-up by HBOS investors for the Edinburgh-based bank's £4 billion rights issue, with just 8.3 per cent of new shares bought.
And while the FTSE 100 reversed this into a gain of more than 50 points at one stage, a lacklustre start to trading on Wall Street subdued late session trading in London.
CMC Markets dealer Jimmy Yates said: "It has been another decidedly mixed day for the Footsie. A poor sign up for the HBOS rights issue damaged confidence early in the session but traders recovered to resume the upward trend.
"However a retest of the 5,400 level has been unsustainable after the start of trade on Wall Street where, despite some solid numbers from Bank of America, the mood has again soured."
HBOS shares bucked otherwise strong gains in the sector. The scheme's underwriters, investment banks Morgan Stanley and Dresdner Kleinwort, said they had managed to sell a further 29.53 per cent of the leftover "rump" shares from the rights issue.
But they were still left picking up nearly two-thirds – 62.18 per cent – of shares worth around £2.6bn. The placing put HBOS shares under pressure, closing down 6.2 per cent, or 17.5p, at 264.5p, well below the placing price of 275p.
In contrast Royal Bank of Scotland consolidated gains enjoyed at the end of last week, adding 3 per cent, or 5.4p to 203p. HSBC was also nearly 3 per cent ahead, rising 20.5p to 814.5p, while Barclays was up 3.75p at 324p.
A clutch of miners were also flying high with the price of gold advancing. Lonmin was 121p ahead at 2,531p and Kazakhmys was 62p up at 1,414p.
Among the fallers, Norwich Union owner Aviva eased after reports in Europe said Abbey owner Santander was in talks to sell its insurance business.
Seen as a possible buyer for the business, Aviva fell 14.5p to 524.5p.
Elsewhere, Vodafone was down as investors digested reports that politicians in Ghana had vetoed the mobile giant's attempts to buy a 70 per cent stake in state-owned Ghana Telecom. Vodafone shares were down 2.75p at 149.25p.
Outside of the top flight, software company Detica jumped 33 per cent, or 98.5p, to 401.5p, after Friday's post-market announcement that it had received a takeover approach.
The full article contains 512 words and appears in The Scotsman newspaper.
