FTSE finishes higher after banking stocks boosted by motor finance appeal

Gains from banking stocks and positive trading on Wall Street helped push London’s equity markets higher on Wednesday.

Banking giant Lloyds was among the FTSE 100’s top risers after the latest legal turn regarding a landmark ruling on hidden motor finance commission.

Close Brothers confirmed the UK’s highest court had granted it permission to appeal against a key ruling from October which could put lenders on the hook for potentially billions of pounds of compensation.

Shares in Close Brothers rose 3.4% to 248p as a result, while Lloyds climbed 2.4%.

The FTSE 100 finished 21.26 points, or 0.26%, higher to end the day at 8,301.62.

The index also benefited from stronger trading in the US, as Wall Street was lifted by the latest CPI inflation figures.

US inflation increased to 2.7% in November, in line with expectations, as the Federal Reserve considers another interest rate cut next week.

Major European indexes were also higher after a stronger afternoon session where they benefited from the weak euro.

The Cac 40 ended 0.39% higher for the day and the Dax index was up 0.42%.

In currency, the pound gained ground against the Euro, which dipped as analysts predicted another rate cut for the Eurozone.

The pound was down 0.08% at 1.276 US dollars but up 0.16% at 1.214 euros.

Chris Beauchamp, chief market analyst at IG, said: “The euro is dropping against the dollar and sterling ahead of the ECB’s (European Central Bank) decision on Friday.

“While both the ECB and the Fed are in easing mode, they are conducting this policy for very different reasons – for the ECB, it’s a question of doing what it can to prop up an ailing economy whereas the Fed can enjoy gently easing policy to support more solid growth.”

In company news, British American Tobacco (BAT) was in the green after it said it is on track to make more money from selling vapes in the second half of the financial year than the first.

However, it added that global tobacco industry volumes are expected to be down 2% year-on-year as more people turn away from smoking traditional cigarettes.

Nevertheless, shares in the company rose by 1%% to 2,999p.

Elsewhere, ProCook shares slid after the kitchenware retailer reported slower like-for-like sales growth close to the budget.

However, it has seen stronger revenues on the back on new store openings across the UK. Shares closed down 5.7% at 35p.

Equals Group shares jumped by 12.1% to 134.5p after it agreed a £283 million takeover by a consortium including investment firm Towerbrook.

The price of oil continued its recovery this week amid hopes of stronger demand in China due to stimulus plans.

A barrel of Brent crude oil was up by 1.54% to 73.30 dollars (£57.46) as markets were closing in London.

The biggest risers on the FTSE 100 were Endeavour Mining, up 89p to 1,589p, Pearson, up 41.5p to 1,279p, Reckitt, up 132p to 4,835p, Fresnillo, up 18p to 699p, and Lloyds, up 1.28p to 54.22p.

The biggest fallers on the FTSE 100 were GSK, down 33p to 1,340.5p, British Land, down 7.8p to 364.4p, Segro, down 14.8p to 720p, Severn Trent, down 49p to 2,549p, and DCC, down 100p to 5,450p.