FTSE 100 continues rally to end week

Friday, 18 July 2008 12:00

The FTSE 100 closed up 1.56 per cent today to end the week continuing yesterday's rally.

The index closed at 5,368.80 - ending the week up two per cent on Monday's opening price and wiping out the effects of a midweek slump.

Banks were boosted by the announcement at Citigroup of smaller losses than previously feared - standing at just $2.5 billion (£1.25 billion) compared to $3 billion expectations.

Barclays was up 10.24 per cent, Lloyds TSB rose 10.15 per cent, and Royal Bank of Scotland was up 10.08 per cent.

HBOS was up 5.13 per cent to 282p on the closing day of its rights issue, which is expected to be undersubscribed leaving underwriters Morgan Stanley and Dresdner Kleinwort with seven per cent of the firm.

Builders supplier Wolseley rose 14.44 per cent - as some confidence returned to construction.

Schroders rose 9.76 per cent.

As the bankers saw a boon, miners suffered.

Ferrexpo dropped 8.24 per cent, Eurasian fell 5.82 per cent, Petrofac was down 5.12 per cent, and Lonmin slipped 4.14 per cent.

John Wood Group fell 4.30 per cent.

David Jones, chief market strategist at IG Index, said: "The bounce back has continued today, with another strong performance by the banking sector helping to keep sentiment positive.

"We have got used to rallies failing recently and it is still early days for the latest recovery, but there is still a feeling amongst some traders that for now at least, the worst may be over."

However, he warned next week could see some potential hurdles.

"While it is too early to say whether medium term the market is yet to turn lower still, the fact that the psychological 5,000 level managed to prop the market up sees the week ending on a much less negative note than we have been used to of late," Mr Jones concluded.

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