Saturday, June 16, 2012

London Markets: Oil firms, banks lift FTSE on BoE liquidity plan

By Sara Sjolin, MarketWatch

LONDON (MarketWatch) ? Shares in U.K. oil firms and banks jumped on Friday, as fresh comments from British Chancellor of the Exchequer George Osborne about cheap bank funding calmed markets, while reports said central bankers are ready to act if the upcoming Greek election triggers a credit crunch.

The FTSE 100 index /quotes/zigman/3173262 UK:UKX +0.02% added 0.5% to 5,493.78.

The great yield rush

The chase for yield may tempt investors to veer from their long-term investment strategies.

Oil firms did most of the heavy lifting in London as oil prices inched back above $84 a barrel. Royal Dutch Shell PLC /quotes/zigman/359915 UK:RDSA +1.44% ? /quotes/zigman/359955 UK:RDSB +0.88% ? /quotes/zigman/379078/quotes/nls/rds.a RDS.A +1.01% ? /quotes/zigman/379012/quotes/nls/rds.b RDS.B +0.79% ?added 1.5%, BP PLC /quotes/zigman/210014 UK:BP +1.16% ? /quotes/zigman/247026/quotes/nls/bp BP +1.44% ?rose 1.9% and BG Group PLC /quotes/zigman/249967 UK:BG +0.61% ?inched 1.9% higher.

Metals prices also had a positive trading day across the board, supporting solid gains for U.K. miners. Vedanta Resources PLC /quotes/zigman/336962 UK:VED +3.82% ?added 4.7%, Evraz PLC /quotes/zigman/7218774 UK:EVR +3.25% ?gained 3.4% and Rio Tinto PLC /quotes/zigman/155899 UK:RIO +0.89% ? /quotes/zigman/182541/quotes/nls/rio RIO +0.72% ?moved 2.4% higher.

Britain's Chancellor of the Exchequer George Osborne and Bank of England Governor Mervyn King.

U.K. banks were boosted by a speech late Thursday by Chancellor George Osborne that the Bank of England will activate an emergency lending program under which auctions of short-term sterling liquidity can be held at any time. Osborne further said the Treasury will provide cheap funds to domestic banks if they boost lending to British households and companies. Osborne: BoE ready to activate emergency lending

Royal Bank of Scotland Group PLC /quotes/zigman/10330253 UK:RBS +7.32% ? /quotes/zigman/530544/quotes/nls/rbs RBS +4.08% ?surged 7.2%, Barclays PLC /quotes/zigman/301787 UK:BARC +3.45% ? /quotes/zigman/152323/quotes/nls/bcs BCS +3.86% ?added 4.3%, Lloyds Banking Group PLC /quotes/zigman/126322 UK:LLOY +3.73% ? /quotes/zigman/255656/quotes/nls/lyg LYG +2.22% ?rose 4.2% and HSBC Holdings PLC /quotes/zigman/13843 UK:HSBA +1.17% ? /quotes/zigman/207333/quotes/nls/hbc HBC +1.00% ?ticked 1.4% higher.

The broader U.K. stock markets tracked gains in Europe, where investors cheered a report from Reuters late Thursday, where Group of 20 officials said central bankers are ready to act if financial market conditions are strained after the Greek parliamentary election on Sunday. Central banks to act on bad Greek outcome: report

On a more downbeat note, data showed the U.K. posted its second biggest global goods trade deficit on record in April, including the biggest trade gap ever with the European Union. Goods exports slumped 8.6% from March, the largest monthly fall since July 2006, signaling weaker demand abroad. U.K. posts second biggest trade deficit on record

Among U.K. stocks heading south, British Sky Broadcasting Group PLC /quotes/zigman/143786 UK:BSY -3.06% ?declined 2.6% to ?6.54, as S&P Equity Research cut the price target to ?7.40 from ?7.60 and kept a hold rating on the stock. The price cut came after the broadcaster secured five out of seven packages to show British Premier League matches, but at a higher cost than expected.

/quotes/zigman/3173262

UK : FTSE Indices

Volume: 0.00

June 15, 2012 2:04p

/quotes/zigman/359915

UK : U.K.: London

Volume: 5.21M

June 15, 2012 2:04p

Market Cap

?134.46 billion

/quotes/zigman/359955

UK : U.K.: London

Volume: 4.55M

June 15, 2012 2:04p

Market Cap

?134.46 billion

/quotes/zigman/379078/quotes/nls/rds.a

US : U.S.: NYSE

Volume: 2.62M

June 14, 2012 4:11p

Market Cap

$209.64 billion

/quotes/zigman/379012/quotes/nls/rds.b

US : U.S.: NYSE

Volume: 783,746

June 14, 2012 4:04p

Market Cap

$209.64 billion

/quotes/zigman/210014

UK : U.K.: London

Volume: 30.75M

June 15, 2012 2:04p

Market Cap

?79.27 billion

/quotes/zigman/247026/quotes/nls/bp

US : U.S.: NYSE

Volume: 10.25M

June 14, 2012 4:02p

Market Cap

$123.21 billion

/quotes/zigman/249967

UK : U.K.: London

Volume: 5.60M

June 15, 2012 2:03p

Market Cap

?41.65 billion

/quotes/zigman/336962

UK : U.K.: London

Volume: 888,841

June 15, 2012 2:03p

Rev. per Employee

?281,656

/quotes/zigman/7218774

UK : U.K.: London

Volume: 3.49M

June 15, 2012 2:04p

Rev. per Employee

?91,343

/quotes/zigman/155899

UK : U.K.: London

Volume: 4.27M

June 15, 2012 2:04p

Market Cap

?40.44 billion

Rev. per Employee

?534,026

/quotes/zigman/182541/quotes/nls/rio

US : U.S.: NYSE

Volume: 3.62M

June 14, 2012 4:01p

Rev. per Employee

$858,542

/quotes/zigman/10330253

UK : U.K.: London

Volume: 21.99M

June 15, 2012 2:04p

Market Cap

?25.36 billion

Rev. per Employee

?273,387

/quotes/zigman/530544/quotes/nls/rbs

US : U.S.: NYSE

Volume: 500,960

June 14, 2012 4:08p

Market Cap

$197.47 billion

Rev. per Employee

$423,098

/quotes/zigman/301787

UK : U.K.: London

Volume: 54.78M

June 15, 2012 2:04p

Market Cap

?23.58 billion

Rev. per Employee

?305,514

/quotes/zigman/152323/quotes/nls/bcs

US : U.S.: NYSE

Volume: 5.98M

June 14, 2012 4:00p

Rev. per Employee

$487,429

/quotes/zigman/126322

UK : U.K.: London

Volume: 261.41M

June 15, 2012 2:04p

Market Cap

?20.93 billion

Rev. per Employee

?354,191

/quotes/zigman/255656/quotes/nls/lyg

US : U.S.: NYSE

Volume: 1.47M

June 14, 2012 4:04p

Rev. per Employee

$552,300

/quotes/zigman/13843

UK : U.K.: London

Volume: 31.65M

June 15, 2012 2:04p

Market Cap

?99.36 billion

Rev. per Employee

?244,345

/quotes/zigman/207333/quotes/nls/hbc

US : U.S.: NYSE

Volume: 2.38M

June 14, 2012 4:01p

Market Cap

$154.68 billion

Rev. per Employee

$369,480

/quotes/zigman/143786

UK : U.K.: London

Volume: 6.66M

June 15, 2012 2:04p

Market Cap

?11.26 billion

Rev. per Employee

?427,465

Sara Sjolin is a MarketWatch reporter, based in London.

Words used in this article:

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