Market Report: Chancellor's chop good news for RBS

Axe swinging by George Osborne at Royal Bank of Scotland's (RBS) investment banking arm helped it to achieve top spot on the blue-chip index yesterday.

News that the taxpayer-owned bank is offloading its equity derivatives unit and has received interest from rivals helped it soar more than 5 per cent on a day when the wider market also surged over 3 per cent.

RBS, pressured by the Chancellor, said last month it will offload parts of its investment bank in a bid to bolster its balance sheet ready for the sale of the Governments' stake in the bailed out bank.

RBS's plans to focus its markets division on fixed income and get out of its complex trading businesses including structured retail and equity derivatives. The derivitives division was reported to have attracted interest from BNP Paribas, Commerzbank and Société Générale – among others – yesterday and the news pushed its shares up 14.1p to 284.1p.

The FTSE 100 rocketed 3.08 per cent, boosted by a surprise statement from the new Bank of England Governor Mark Carney who more or less ruled out interest rate rises in the medium term. This was joined by a statement from European Central Bank president Mario Draghi who said rates will remain at current or lower levels for an "extended period" to help the recession-hit eurozone economy.

The benchmark index added 191.8 points to 6,421.67 – the biggest daily rise in percentage terms since the end of November 2011. The jump added £48.99bn to the value of the UK's biggest companies, according to the FTSE Group.

Other banks were also gainers boosted by Mr Carney's comments and Standard Chartered advanced 69p to 1,496.5p.

Car and aerospace engineering specialist GKN revved up 14.3p to 322.1p on strong car-sales data in the UK which followed good results from the US recently.

Panmure Gordon's Jean Roche took another look at high street bellwether Marks & Spencer (M&S). She reiterated her buy rating on the retailer for four reasons: its good food division, the potential for turnaround in clothing with new style director Belinda Earl in place, its growing international business and its recent commitment to shareholder returns. M&S was 18.5p better off at 459.8p.

On the mid-tier index, gold miner Centamin shimmered up 4.6p to 35.75p as traders decided the military coup in Egypt could be good news for its pending court case over its licence for the Sukari mine in that country.

Analysts at Peel Hunt said "these developments clearly elevate the political uncertainty surrounding Centamin, and at this stage the implications for the ongoing court case is unknown.

"We remind investors that the ultimate outcome is likely to be a binary one. We remain of the view that this binary outcome will be in Centamin's favour."

Over on Aim, fashion follower David Reynolds at Jefferies put his hands up and admitted that he had got online clothing group Asos all wrong. Mr Reynolds and his team had previously been a seller of the Aim-listed fashion website, giving it an "underperform" rating. He said this was an "ill-judged downgrade" and upgraded the company to buy. The analyst also nearly tripled his price target on the stock, raising it from 2,199p to 6,200p on the grounds of "high-quality senior management", its "massively disruptive business model" and "continuing brand momentum".

Mr Reynolds's new outlook was echoed by investors and Asos picked up 228p to 4,355p. But he sounded one word of warning – he is still concerned about future margins.

Department store chain Beales reported a fall in its pre-tax losses in the first half but the small-cap retailer said conditions remained tough and the stock declined 3.75p to 11.25p.

Enables IT, the network and IT expert, won a £750,000 healthcare contract and it rose 5p to 44.5p.

US-focused oil and gas tiddler Northcote Energy has set up a partnership vehicle for US investors to invest but it closed unmoved at 1.52p.

Zoltav Resources, the listed oil and gas explorer backed by ARA Capital which is run by Chelsea FC owener Roman Abramovich's son Arkadiy, has bought its first Russian oilfield. It has acquired the Koltogor field in Khantiy-Mansisk in western Siberia and it gushed 136.18p – or 1,995 per cent – to 143p.

PROMOTED VIDEO
Arts and Entertainment
Babysitter Katie and Paul have terse words in the park
tvReview: The strength of the writing keeps viewers glued to their seats even when they are confronted with the hard-hitting scenes
News
i100
Arts and Entertainment
American singer, acclaimed actor of stage and screen, political activist and civil rights campaigner Paul Robeson (1898 - 1976), rehearses in relaxed mood at the piano.
filmSinger, actor, activist, athlete: Paul Robeson was a cultural giant. But prejudice and intolerance drove him to a miserable death. Now his story is to be told in film...
Sport
England’s opening goalscorer Alex Oxlade-Chamberlain battles with Scotland’s Charlie Mulgrew
FootballEngland must learn to keep possession and dictate games before they are exposed by the likes of Germany and Brazil
Life and Style
Make-up artists prepare contestants for last year’s Miss World, held in Budapest
fashion
Sport
Wigan Athletic’s back-of-the shirt sponsor Premier Range has pulled out due to Malky Mackay’s arrival
Football
News
ebooksNow available in paperback
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: Trainee Recruitment Consultant - Soho

£20000 - £25000 per annum + OTE £35,000: SThree: We consistently strive to be ...

Ampersand Consulting LLP: Markit EDM (CADIS) Developer

£50000 - £90000 per annum + benefits: Ampersand Consulting LLP: Markit EDM (CA...

Carlton Senior Appointments: Director, Private Bank - San Francisco, CA

$175 - $200 per annum, Benefits: full benefits: Carlton Senior Appointments: P...

Carlton Senior Appointments: San Diego, CA – Tier 1 House - Senior MD FA

Not specified: Carlton Senior Appointments: Senior MD Financial Advisor - San ...

Day In a Page

US immigration: President Obama ready to press ahead with long-promised plan to overhaul 'broken system' - but will it get past a Republican-controlled Congress?

Immigration: Obama's final frontier

The President is ready to press ahead with the long-promised plan to overhaul America's 'broken system' - but will it get past a Republican-controlled Congress?
Bill Cosby rape allegations explained: Why are these allegations coming out now? Why didn’t these women come forward earlier? And why has nobody taken legal action?

Bill Cosby rape allegations explained

Why are these allegations coming out now? Why has nobody taken legal action? And what happens next for the man once thought of as 'America's Dad'
Four years of excruciating seizures caused by the 1cm tapeworm found burrowing through a man's brain

You know that headache you’ve got?

Four years of excruciating seizures caused by the 1cm tapeworm found burrowing through a man's brain
Travelling to work by scooter is faster than walking and less sweaty than cycling, so why aren’t we all doing it?

Scoot commute

Travelling to work by scooter is faster than walking and less sweaty than cycling, so why aren’t we all doing it?
Paul Robeson: The story of how an American icon was driven to death to be told in film

The Paul Robeson story

How an American icon was driven to death to be told in film
10 best satellite navigation systems

Never get lost again: 10 best satellite navigation systems

Keep your vehicle going in the right direction with a clever device
Paul Scholes column: England must learn to keep possession and dictate games before they are exposed by the likes of Germany and Brazil

Paul Scholes column

England must learn to keep possession and dictate games before they are exposed by the likes of Germany and Brazil
Michael Dawson: I’ll thank Spurs after we win says defender as he prepares to return with Hull

Michael Dawson: I’ll thank Spurs after we win

Hull defender faces his struggling former club on Sunday ready to show what they are missing. But he says he will always be grateful to Tottenham
Frank Warren column: Dr Wu has big plans for the professionals yet he should stick to the amateur game

Frank Warren column

Dr Wu has big plans for the professionals yet he should stick to the amateur game
Synagogue attack: Fear unites both sides of Jerusalem as minister warns restoring quiet could take 'months'

Terror unites Jerusalem after synagogue attack

Rising violence and increased police patrols have left residents of all faiths looking over their shoulders
Medecins sans Frontieres: The Ebola crisis has them in the headlines, but their work goes far beyond West Africa

'How do you carry on? You have to...'

The Ebola crisis has Medecins sans Frontieres in the headlines, but their work goes far beyond West Africa
Isis extends its deadly reach with suicide bombing in Kurdish capital

Isis extends its deadly reach with suicide bombing in Kurdish capital

Residents in what was Iraq’s safest city fear an increase in jihadist attacks, reports Patrick Cockburn
Underwater photography competition winners 2014 - in pictures

'Mysterious and inviting' shot of diver wins photography competition

Stunning image of cenote in Mexico takes top prize
Sir John Major: Negative West End portrayals of politicians put people off voting

Sir John Major hits out at theatres

Negative West End portrayals of politicians put people off voting
Kicking Barbie's butt: How the growth of 3D printing enabled me to make an army of custom-made figurines

Kicking Barbie's butt

How the growth of 3D printing enabled toy-designer to make an army of custom-made figurines