FTSE up as central bank action settles nerves


The top share index gained 1.9% by midday on Thursday, led by financials as major central banks poured in billions of dollars to boost liquidity and Lloyds TSB sealed a deal to buy HBOS.

By 11:58 a.m., the FTSE 100 was up 87.4 points at 4,999.7 but remained volatile, having bounced from a low of 4,883.3. The benchmark lost 2.3% in highly volatile trading on Wednesday, and is down 7.8% on the week, the biggest fall since July 2002.

The turmoil in the markets prompted the Federal Reserve and other central banks to pump billions of dollars into the global money markets in a coordinated effort to ease a funding squeeze. The move allayed some of the fears on the health of the global financial system that has seen traumatized investors dump shares. “We’ve had a week of markets plunging, and there’s been good news at a time when the market has been oversold,” said Mike Lenhoff, chief strategist at Brewin Dolphin.

Lloyds TSB sealed a 12.2 billion pound deal to buy HBOS, Britain’s largest mortgage bank, to create a dominant mortgage and savings provider. The deal lifted sentiment in a banking sector that has been battered by the financial crisis which has seen the demise of Lehman Brothers this week. HBOS gained 51% on the takeover by Lloyds TSB, which fell 4.7%. Other banking stocks gained with Barclays up 4.6% and Royal Bank of Scotland up 7.6%.

HSBC rose 1.9%. The bank was cited as a possible buyer of US investment bank Morgan Stanley by broadcaster CNBC, but a person familiar with the matter said on Thursday HSBC was not interested. Other financial stocks also gained, with London Stock Exchange adding 13.1%. Traders cited increased volumes and talk that rival platform Turquoise may suffer as a result of its backing by embattled investment banks.

Insurers Prudential and Aviva gained as The Times said the firms were among a handful of European insurers expected to be front-runners in a multibillion-dollar auction of stricken insurer AIG’s prime assets. Prudential was up 4.3% while Aviva gained 5.9%.


Miners benefited from stronger metals prices as a slight return to risk appetite boosted global demand. Anglo American was up 6.4%, Lonmin was up 3.8% and Rio Tinto gained 4.0%. Similarly, energy stocks gained as crude oil gained nearly $2 to trade around $99.00.

BP added 2.5%, Royal Dutch Shell rose 2.8% and BG Group climbed 3.7%. Summer promotions and back-to-school shopping gave retail sales an unexpected boost in August.

Kingfisher gained 9.3% as Europe’s biggest home improvements retailer beat first-half profit forecasts and said cost cuts would help it cope with very tough trading conditions. Enterprise Inns was up 13.8% after Goldman Sachs removed the company from its pan-Europe sell list. (Reuters)

Number of Doctors per 10,000 Inhabitants Reaches 44 Figures

Number of Doctors per 10,000 Inhabitants Reaches 44

Karácsony Declared Winner in Budapest Mayoral Race After Rec... Elections

Karácsony Declared Winner in Budapest Mayoral Race After Rec...

Kecskeméti Konzerv Sold With Legal Support From Wolf Theiss Deals

Kecskeméti Konzerv Sold With Legal Support From Wolf Theiss

White Party at The Duchess Coming This Weekend Drinks

White Party at The Duchess Coming This Weekend


Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.