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Hedge fund buyers were snapping up shares in the UK's leading banks as the re-rating of the banking sector continued apace.
Shares in state-owned High-Street lender Royal Bank of Scotland briefly climbed back above 50p for the first time since the start of the year before settling to trade 4.5p higher at 48.5p, making them one of the best performing blue-chip stocks on the day.
The sector is being supported by Harry Hedge fund and his mates. They were big sellers of bank shares throughout the banking crisis, so it should come as little surprise they have begun the push higher in a market place short of stock.
Others to go better included Lloyds Banking Group, up 14.7p at 124.3p, its highest since the start of the year, and Barclays, 20¼p ahead at 299¼p. Barclays shares were changing hands at less than 200p just two weeks ago, having struck a record closing low of 51.2p toward the end of January.
It is worth pointing out that last year's spate of rights issues launched by the banks remain out of the water.
Shares generally were happy to take their lead from a robust performance overnight on Wall Street. Bank of America Merrill Lynch says the
“R-word now stands for recovery” fuelled by a sharp rise in business and consumer confidence last month.
The FTSE 100 index jumped 134 points and later posted a rise of 104.7 to 4347.92, its highest since 13 January. The FTSE 250 index was 284.22 higher at 7855.5. New York struggled to make headway this afternoon as profit takers moved in. The Dow fell 10.9 to 8415.8.
Mining stocks rose amid signs of an increase in demand for raw materials from China. Kazakhmys climbed 66½p to 656½p closely pursued by Eurasian Natural Resources, 59p ahead at 679p, and Vedanta Resources, gaining 154p at 1284p.
Long-only funds which have watched the market climb steadily higher also felt obliged to get involved and began targeting the likes of British Airways, up 17.7p at 165.7p on turnover of 28 million shares, BP, 8½p better at 494¼p (30 million shares) and BAE Systems, 9p dearer at 368½p (17 million). Legal & General firmed 3.8p at 60.1p after Goldman Sachs added the shares to its preferred buy list.
Debt-laden Taylor Wimpey rose 5½p to 49¾p after Cazenove lifted its rating on the housebuilder from in-line to outperform, but it has downgraded former Footsie 100 constituent Persimmon, up 33½p at 412¼p, and rival Bellway, 32p better at 741p, from outperform to in-line.
The sector is keen to refinance either by going cap in hand to shareholders, or renegotiating bank agreements.
Quoted stockbroker WH Ireland marked time at 52p. Suspended deputy chairman Laurie Beevers has confirmed the sale of 559,775 shares to former bidder Blue Oar Securities without board consent.
It reduces his holding to 1.3 million, or 6.21%. Fellow suspended director David Youngman has also sold 559,775 shares, reducing his stake to 899,085, or 4.2%.
