Banking rally lifts FTSE 100

Thursday, 26 February 2009 12:00

A banking rally helped lift the FTSE 100 but the index is still trading below the 4,000 mark.

The UK's leading shares index ended the day at 3,915.64, up 1.73 per cent.

Lloyds Banking Group surged 30.66 per cent to 75p over the session, while Royal Bank of Scotland jumped 25.54 per cent to 29p.

Shares in the two banks were boosted after RBS revealed details of the government's asset protection scheme, which was cheaper than had been predicted by some analysts.

Further injections of cash have also soothed investors, who have been concerned over the threat of nationalisation.

David Jones, chief market strategist for IG Index, said: "So far the lows for last year, on both the FTSE and the broader US index, the S&P 500, have managed to halt the latest decline.

"But with seemingly no end to the worsening economic news, it is hard to see any share-price rally proving to be anything but fragile."

US stocks also rallied on opening, with the Dow Jones and S&P 500 indices up 1.5 per cent.

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