Heavyweight banks push FTSE 100 higher after BoE removes dividend restrictions


A man takes cover under an umbrella as he walks past the London Stock Exchange in London, Britain August 24, 2015. REUTERS / Suzanne Plunkett / File Photo

  • British Land wins on optimistic outlook
  • UK retailers record record annual sales increase
  • FTSE 100 increases 0.3%, FTSE 250 increases 0.2%

July 13 (Reuters) – London’s FTSE 100 rose on Tuesday as heavyweight banks surged after the Bank of England removed restrictions on dividends, but concerns over rising coronavirus infections have capped earnings.

Banks (.FTNMX301010) added 2%, the most of any industry, after the central bank removed pandemic-era restrictions on dividends from HSBC, Barclays and other major lenders with immediate effect . Read more

The blue chip FTSE 100 (.FTSE) rose 0.3%, with HSBC (HSBA.L), Barclays (BARC.L) and Natwest Group (NWG.L) being the main drivers, gaining between 0, 5% and 1.4%.

“The easing of these restrictions is also an acknowledgment that the sector is in a fairly solid financial position and marks an interesting contrast to the European Central Bank, which has signaled caution over a rapid return to big dividends in the eurozone.” said Danni Hewson, an analyst at AJ Bell.

Base metals (.FTNMX551020) and precious metals (.FTNMX551030) miners and energy stocks (.FTNMX601010) followed the gains in commodity prices. Rio Tinto (RIO.L), Anglo American (AAL.L), BHP Group (BHPB.L) and Royal Dutch Shell (RDSa.L) were among the top winners of the FTSE 100.

The FTSE 250 Mid-Cap Index (.FTMC) climbed 0.2%, with retailers Dr Martens (.DOCS.L) and Howden Joinery Group (HWDN.L) among the top gainers.

UK retailers (.FTNMX404010) climbed 0.5% after reporting a record annual increase in sales for the three months to the end of June. Read more

The FTSE 100 has gained 10.5% so far this year, but has largely been limited to near the 7,100 mark since June. It underperformed the broader European index – which is currently trading near record highs – after a recent surge in variant coronavirus cases raised fears of a prolonged economic recovery.

Among stocks, British Telecom (BT.L) gained 0.5% after Italy’s competition watchdog said it had conditionally cleared Telecom Italia (TLIT.MI) ‘s proposed acquisition of some of the business units of the UK telecommunications group. Read more

UK commercial real estate firm British Land Co Plc (BLND.L) jumped 1% after saying it saw a noticeable improvement in activity in its business after the lockdowns were lifted.

Reporting by Shashank Nayar in Bangalore; Editing by Subhranshu Sahu and Uttaresh.V

Our Standards: Thomson Reuters Trust Principles.

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