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Banks in focus as FTSE gains level out.

Byline: Steven Keppie

FOLLOWING on from the stellar gains made on Thursday, the FTSE 100 Index lacked direction on Friday. The Index closed up 12.6 points at 5875.4.

US figures showed that non-farm payrolls rose by 151,000 last month, better than the 60,000 forecast. This was the first time since May that the US economy has added jobs and this was largely down to private sector hiring. The unemployment rate still remains high and has been over 9% since May 2009.

The banking sector was in focus as Royal Bank of Scotland and HSBC released interim management statements on Friday. The Royal Bank of Scotland, which is 83% government-owned, delivered no surprises and stated that "the fourth quarter market environment will remain challenging".

It returned to the red in the period between July and September with losses of pounds 1.4bn, attributed to accounting charges and lower investment banking returns. However, it raised staff costs as a percentage of revenues from 32% to 40% in its global banking and markets team. Shares dropped 4.5% following the results, closing at 45p.

The figures for HSBC showed solid earnings from Europe and robust growth in the Far East. The company, which has a strong presence in Asia and other emerging markets, reported that its latest data showed a slowdown in economic growth in emerging markets. But HSBC reiterated its conviction that growth in emerging markets would continue to outstrip more developed countries. The effect of the economic and housing problems in the US caused some concern with investors and the shares fell 1.74% to 683p.

D1 Oils, the alternative energy company, was the top performing share in the North Index with an increase of 8.36%. The company secured a UK patent for a process relating to animal feed. The shares finished the day at 5.83%.

Steven.Keppie@Brewin.co.uk
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Title Annotation:Features
Publication:The Journal (Newcastle, England)
Date:Nov 6, 2010
Words:316
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