The FTSE 100 was 40.2 points ahead at 3582.6 while the FTSE 250 gained 81.3 points to 5851.1 at around 11.58am.
The market recovered as financial stocks rebounded from last night’s lows, with Barclays, which this morning was upgraded to “outperform” by Credit Suisse, surging by 15.1 per cent or 9.3p to 70.7p.
“In our view, Barclays is probably the most interesting of all the UK banks (including the Asians),” the broker said, adding:
“On current estimates, the shares trade at 0.24 times 2008 tangible book value, with a present value range of 88-202p on our 2011 base and stress scenario, well above the current share price.”
The wider sector was also strong, trading higher as investors moved in to capitalise on recent gains. As a result, HSBC advanced to 392.5p, up 12.4 per cent or 43.5p, and Royal Bank of Scotland climbed to 21.15p, up 9.4 per cent or 1.8p.
The sugar and sweetener maker Tate & Lyle was 5 per cent or 11.5p stronger at 241p after Merrill Lynch moved the stock to “neutral” from “underperform”.
Investec also weighed in, moving the stock to “hold” from “sell” and saying that, despite recent market concerns, it thought the divided was safe.
“With the shares yielding more than 10 per cent, the market is clearly questioning the sustainability of the dividend. Our view is that the dividend is sustainable and that Tate’s financing envelope, while tight, is manageable,” Investec said, adding:
“There is however little margin for error and we expect a substantial uncertainty discount to overhang the shares on a six-to-nine-month horizon.”
The City spread better IG Index slumped to 171p, down 33.7 per cent or 87.25p, after posting an interim management statement. Although the headline figures appeared positive – revenue, driven by the new FXOnline business, was up 35 per cent in the three months to the end of February – traders expressed concern about the uncertain outlook. For its part, IG acknowledged that, despite strong growth in its newer businesses, “the overall growth of the group has been impacted by a very strong comparative period”.
“It remains difficult to predict future trends in volatility or customer reaction to changing market and economic conditions,” the company said.Reuse content