RBS and Lloyds help Footsie rise while mining stocks fall on profit-taking

FTSE: 5,418.65 (+24.12) Mid-250: 10,576.81 (+50.89) Small Cap: 3,011.07 (–11.15)LONDON EQUITIES rose yesterday, as resource stocks fell after two sessions of gains, but sustained strength among financial stocks led to hopes that the FTSE 100's next major move could be positive.

Financial Timesreports that the UK's biggest banks will avoid any major restructuring until after the general election in 2015 helped share prices in the sector avoid a bout of profit-taking in the wider market after two days of gains.

Royal Bank of Scotland was among the strongest stocks on the leaderboard, up 8.2 per cent at 26.25p. Lloyds Banking added 6.1 per cent to 35.67p and Barclays was 5.6 per cent higher at 180.35p. HSBC gained 0.4 per cent to 538.5p.

The best single advance came from Hargreaves Lansdowne after the fund manager’s results showed a stronger than forecast rise in assets under management of 41 per cent. The shares strode 17.7 per cent higher to 508.5p.

“August certainly finished with a flourish for European markets,” said Cameron Peacock, analyst at IG Markets. “In the light of the strong gains . . . we’re going to see a degree of consolidation at the open.”

But looking further ahead, Enis Mehmet, analyst at Autochartist, was more upbeat: “Now that the main trend has turned positive on the [FTSE 100’s] daily chart, traders have their eyes set on the next upside objective. Based on the July top at 6,084.08 to the August bottom at 4,791.01, traders are determined that this market may have enough momentum to test a range at 5,437.55 to 5,590.13.”

But as September trading got under way, heavily weighted mining stocks – crucial to the FTSE 100’s chances of making progress – were hit by profit-taking. Mexican silver producer Fresnillo fell 3.7 per cent to £20.22, while Kazakstani ferro-alloys maker ENRC fell 0.7 per cent to 677p.

Shares in office staffing services company Hays rose 6.7 per cent to 80.55p after it reported a 50 per cent rise in annual profit before tax of £106.6 million.

The top spot on the mid-cap leaderboard went to Charter, up 4.7 per cent to 799p after suitor Melrose increased its offer for the engineer by 2 per cent to 850p per share. Although Charter stopped short of recommending the offer, it did open up its books for due diligence. – (Copyright The Financial Times Limited 2011)