Finance firms help FTSE climb despite higher borrowing

Banks and financial stocks helped power the FTSE to gains on Tuesday as the previous day’s hesitancy among traders faded.

Federal Reserve chief Jerome Powell’s rosy outlook late on Monday helped global markets start the day in fine fettle.

The UK blue-chip index made gains as a result, although increased borrowing and record price increases across British manufacturers tempered the optimism.

The FTSE 100 ended the day up 34.33 points, or 0.46%, at 7,476.72 points.

“Rising bond yields continue to bolster financial stocks around the globe, and after the recent strength in commodity names, today it is the turn of the FTSE 100’s finance contingent to rise,” said Chris Beauchamp, chief market analyst at IG.

“Still, after the huge bounce from early March the index, and markets generally, is going to need a major new catalyst to drive it higher from here.”

German markets also saw finance firms work as a major driver, with Deutsche Bank surging in value.

The French Cac was up 0.87% and the German Dax had increased 0.84% by the end of the session.

Across the Atlantic, Wall Street shrugged off losses in the bond market as the Nasdaq 100 climbed to a one-month high.

Sterling was robust ahead of February’s inflation reading from the Office for National Statistics but lost some ground against a buoyant dollar.

The pound decreased by 0.05% against the dollar to 1.325, and rose 0.01% against the euro to 1.203.

In company news, B&Q and Screwfix parent firm Kingfisher was at the foot of the FTSE 100 at the end of the session after posting a marked fall in sales in the three months to the end of January.

Bosses said part of the fall, which included a rare drop at Screwfix stores, was due to strong comparisons with a year earlier when lockdowns saw households turn to DIY.

Shares in Kingfisher declined by 18.4p to 272.9p.

Shares in Trustpilot plunged after the online review platform revealed widening losses despite an uptick in its bookings business.

The firm’s stock finished 24p lower to 137.8p per share after it posted a 25.9 million dollar (£19.6 million) pre-tax loss in 2021, as administration costs more than doubled for the year.

JD Sports shares gained momentum after sportswear giant and major supplier Nike posted climbing third-quarter revenues in the US.

Nike posted a 5% rise for the three months to February, buoyed by strong growth at its Nike Direct division, helping spark optimism of a strong period for the sector. JD finished 4.4p higher at 153.3p as a result.

The price of oil moved briefly to its highest in more than a week before slipping back on speculation the EU is still some way from agreeing sanctions on Russian oil imports.

Brent crude dropped by 0.98% to 114.49 US dollars per barrel when the London markets closed.

The biggest risers on the FTSE 100 were Prudential, up 44.5p to 1,128.5p, Aviva, up 14.4p to 440.7p, Lloyds, up 1.61p to 50.24p, HSBC, up 15.8p to 516.6p, and NatWest Group, up 6.7p to 336.6p.

The biggest fallers were Kingfisher, down 18p to 272.9p, Auto Trader, down 30p to 646.8p, Fresnillo, down 29p to 719p, Endeavor Mining, down 45p to 1,865p, and CRH, down 77p to 3,308p.