FTSE 100 index rallies after Asian markets as the share prices of Reckitt Benckiser and IAG rise
The FTSE 100 index shot higher today after a rally on most Asian stock markets, despite poor trade data coming out of China.
The UK's blue-chip index rose 2.26 per cent to 5,836 points in early afternoon trading, led higher by Reckitt Benckiser and British Airways owner International Consolidated Airlines Group (IAG).
"No severe sell-off in Chinese markets after a week’s holiday and a massive rally in Japan has allowed financial stocks to break out of the doghouse and lead Europe’s major indices higher buoyed by HSBC’s decision to stay in Canada," said Jasper Lawler, markets analyst at CMC Markets.
HSBC rose today on the news. Its share price was up 0.98 per cent to 444.7p.
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"I get the impression that there have been some sensible conversations with George Osborne, the Treasury, Bank of England and the Financial Conduct Authority. There clearly has been some softening of approach by the authorities in their attitude to HSBC," said David Buik, market commentator at Panmure Gordon.
"In fairness HSBC also realises that London is the best place to conduct complicated M&A and other business transactions and also accepts that London is the legal capital of the world. Good sense has prevailed," he added.
Other banks followed suit. Lloyds was trading 2.72 per cent higher at 60.07p per share, while Barclays rose 2.42 per cent to 161p per share. Royal Bank of Scotland was up 2.28 per cent to 245.57p per share.
Reckitt Benckisser Group was one of the largest risers after it said it expects to deliver another year of growth despite difficult macro conditions. Its share price rose 6.55 per cent to 6,357p.
IAG was also up 4.94 per cent at 503.5p per share on the same day its chief executive Willie Walsh is set to announce it will become the first airline group worldwide to set its own carbon emissions targets.
Analysts at Bank of America also upgraded their view of IAG shares from "underperform" to "buy", bypassing "hold" altogether, according to the BBC.