The FTSE 100 Index staged a modest recovery despite further stress for Asian markets over fears that China’s economy is overheating.
A resilient session on Wall Street following a jump in profits at Morgan Stanley meant the top flight lifted 26.1 points to 5893.9 after falling 2% on Thursday amid fears that China will have to cool economic growth.
Those worries continued to hamper Asian markets as the Nikkei 225 in Tokyo fell more than 1% and Hong Kong’s Hang Seng index also dropped.
Banks set the pace in London after Morgan Stanley’s 80% rise in fourth-quarter profits and as the Financial Times reported that Royal Bank of Scotland (RBS) and Treasury officials were examining ways in which the bank could secure an early exit from the government’s asset protection scheme.
RBS jumped 5%, or 2.1p, to 44.3p while fellow part-nationalised bank Lloyds Banking Group added 1.4p to 68.2p and Barclays improved 1.1p to 304.35p.
National Grid was one of the leading fallers, down 7p to 532p after New York regulators granted a smaller-than-requested rate increase in the state.
Outside the top flight, shares in outsourcer Mouchel jumped 19%, or 21.25p, to 135p after construction firm Costain revealed a third takeover proposal worth more than £170 million.
Luxury goods group Mulberry continued its run of form, rising 59p to 1309p after forecasting profits ahead of market expectations.