FTSE shares rally runs out of steam

FTSE shares rally runs out of steam

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The FTSE Index was 20.2 points down at 5648.5

A rally for London shares in the wake of the Irish bail-out package has run out of steam despite a resilient session for UK banking stocks.

With investors fearful that Ireland’s £72 billion rescue will not signal the end of the eurozone debt crisis, shares in London struggled for direction.

The FTSE 100 Index started Monday more than 40 points higher but later retreated to stand 20.2 points down on its opening mark at 5648.5, reflecting losses for a clutch of mining and energy stocks.

The uncertain performance mirrored expectations for a lacklustre session on Wall Street as trading resumes after the Thanksgiving lull.

IG Index trader Ben Critchley said sales during America’s traditional “Black Friday” spending spree were only marginally higher than last year, while traders may look to sit on the sidelines ahead of US unemployment figures on Friday.

He added: “It’s no secret why investors are still nervous – the worry is that Ireland won’t mark the end of the eurozone crisis and with the economies of Portugal and Spain looking less than robust, markets are worried that we could be talking about potential bailouts once again in the not too distant future.”

London’s banks were mostly in positive territory after a difficult end to last week, with Royal Bank of Scotland and HSBC up 0.5p to 39.1p and 12.8p to 773.9p respectively and Lloyds Banking Group down 0.5p to 61.4p after surrendering an initially upbeat start.

Elsewhere in the top flight, BSkyB shares were up 1.5p to 722p after the pay television operator unveiled joint venture plans for a free-to-air, Arabic language news channel across the Middle East and North Africa from 2012.

In a thin session for corporate news, British Airways rose 0.6p to 272.6p after its shareholders voted in favour of the airline’s merger with Spain’s Iberia.

Outside the top flight, Punch Taverns lifted 6% amid speculation that it planned to call time on nearly 6,000 pubs in a move to slash its £3 billion debt mountain. Punch, which climbed 3.9p to 63p, will reportedly focus on its 800 managed pubs after offloading the leasehold estate to bondholders.

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