Markets Edge Up on Lloyds News

Lower unemployment, lower government debt and now some good news from the banks – yet markets only managed to edge ahead.

Morningstar 19 March, 2010 | 5:19PM
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The banks drove markets higher as Lloyds said that it was likely to return to profit in 2010. The surprise update sent Lloyds’ shares up 8.2% to 60p and brought the rest of the banking sector with it. Royal Bank of Scotland and Barclays ticked up 4.8% to 44p and 1.3% to 357.6p respectively. In particularly, markets were encouraged by lower bad debt provision, suggesting that Lloyds may have unearthed the majority of HBOS’s toxic loans.

Overall, the FTSE 100 was up 7.5 points to 5,650. This concludes a better week for the benchmark UK index, now at its highest level in 21 months. The European markets couldn’t maintain momentum in the face of falls from the S&P and Dow Jones. At close the German Dax was down 0.5% to 5,982, while the S&P had dipped 0.5% to 10,719.

The banks were the biggest news of the day, but the potential bid for Arriva rumbled on. The shares couldn't maintain their week of strong gains and dipped 0.35% to 705.5p by the close of trading. After confirmation of bid interest from Deutsche Bahn AG yesterday, ComfortDelGro, the Singapore-based company that operates London’s Metroline buses was rumoured to be mounting a counterbid. The German group’s opening bid has been set at £1.4bn.

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