The London market has pushed higher despite falls in the banking sector triggered by uncertainty over the future of the industry.
Cautious trading on Wall Street, ahead of a Federal Reserve meeting and the US president’s State of the Union address later in the week, saw the Dow Jones Industrial Average nudge up 0.1%.
The mood in the US did little to move the London market in either direction, as the FTSE 100 Index sat 38 points higher at 5935.
US stocks were boosted by decent earnings reports, from fast-food giant McDonald’s, which said its net income rose 2% as more customers bought up its McRib sandwich and new McCafe coffee products.
Royal Bank of Scotland and Lloyds were the heaviest fallers on the Footsie after a speech by the chairman of the Independent Banking Commission sent ripples of concern through the banks.
While Sir John Vickers ruled out a full-scale break-up of the banks, he mulled plans to ring-fence their retail operations from investment banking and said important institutions should be required to hold more core capital than in the current regime.
The biggest loss in the banking sector was achieved by Lloyds, which fell more than 3% or 2.2p to 65.2p, while Royal Bank of Scotland dropped 1.5p to 43.5p and Barclays fell 3.2p to 297.7p.
The latest political turmoil in Ireland, where the coalition government is on the brink of collapse, added to fears over the sector’s exposure to the country and the eurozone debt woes in general.
The other main interest of the session came from the debut of International Consolidated Airlines Group following the merger of British Airways and Iberia. Shares were 285.5p, a rise of more than 1% from the pair’s joint valuation on Thursday, when BA called time on nearly 24 years of trading under its own name.
The stock received an early boost as broker UBS initiated coverage on the new stock with a buy rating and a price target of 360p.