London’s blue chip share index has paused for breath today after the 2.3 per cent bounce-back seen in the previous session.
The FTSE 100, which enjoyed its biggest one-day gain in four months yesterday, after Dubai World, the state-owned conglomerate, revealed plans to restructure nearly half its $60 billion (£36 billion) debt mountain, closed up 15.22 points or at 5,327.39 points.
Commodity shares were in favour amid a fresh surge for gold to a new record price of around $1,217 an ounce as the greenback continued to be snubbed by investors.
Miners were heavily represented on the leaderboard with Eurasian up 15.5p, or 1.72 per cent, to 914.5p, Vedanta Resources up 61p, or 2.56 per cent, to £24.47 and Kazakhmys up 26p, or 2.03 per cent, to £13.06.
The biggest riser was Sage Group, which added 7p, or 3.26 per cent, to 221.7p after investors warmed to its in-line full-year results. The rise came despite the accountancy software group saying that it was not yet seeing any sign of recovery.
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Banks were hardest hit after the Royal Bank of Scotland confirmed a report in The Times that the Treasury had seized control of its bonus pool. Shares in the bank, which is 84 per cent state-owned, fell 0.71p or 2.09 per cent to 33.55p, after the Treasury’s move left institutional investors concerned about the bank’s ability to compete with its rivals.
RBS said that it had been forced to agree to the restrictive terms to join the Asset Protection Scheme, the costly state-backed insurance scheme for bad debts.
The sector was also hit by a downbeat note from Credit Suisse, which said that, despite a 10 per cent drop in UK bank share prices in the past two weeks, they still had further to go. “Given the risks, we remain cautious,” the note read.
Lloyds Banking Group shed 1.04p, or 1.92 per cent, to 53.1p.
In Paris the CAC 40 rose 0.53 per cent to 3,795.92 while the Frankfurt Dax was stable, rising just 0.09 per cent to 5,781.68.
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US stocks were mixed. The S&P 500 and Nasdaq rose, lifted by positive news on online retailers such as Amazon, while the Dow edged lower with energy and financials following mixed data on the labor market.
The major stock indexes pared early gains on concerns that bank profits could be hurt under derivatives legislation being considered.
“The banks don’t know what the heightened financial reform is going to be. There is no clarity to regulation,” said Weston Boone, vice president of listed trading at Stifel Nicolaus Capital Markets in Baltimore.
In mixed news on the crucial labour market, US private employers shed 169,000 jobs in November, fewer than the 195,000 that were cut in October, though the report came in worse than expected, according to the ADP National Employment private sector survey.
The Dow Jones industrial average fell 15.27 points, or 0.15 per cent, to 10,456.31. The Standard & Poor’s 500 Index inched up just 0.15 point, or 0.01 per cent, to 1,109.00. The Nasdaq Composite Index gained 11.34 points, or 0.52 per cent, to 2,187.15.