The FTSE 100 Index has pushed to a fresh two-and-a-half-year high after the banking sector shrugged off Government plans to increase the rate of its new levy.
The London market closed ahead despite weighty mining stocks suffering losses as investors feared China’s decision to raise interest rates would weaken the country’s hunger for commodities.
The Footsie clawed back earlier losses to finish up 40.3 points to 6091.3, its highest point since May 2008.
Chancellor George Osborne’s decision to change the terms of the banking levy to raise an additional £800 million this year was not enough to deter investors from banking stocks, with Barclays and Royal Bank of Scotland closed up 1.6p to 314.4p and 0.3p to 44.5p respectively.
HSBC was also up 12.1p to 718.1p and Lloyds was ahead 1.4p to 66p.
The pound was down against both the euro and the dollar, at 1.61 and 1.18 respectively, as it lost gains from earlier in the week when investors speculated the Bank of England will raise interest rates on Thursday.
Marks & Spencer’s success in poaching a senior Tesco executive Laura Wade-Gery to lead its internet expansion caused the retailer’s shares to jump more than 4%, up 13.5p to 373.3p.
The appointment should help chief executive Marc Bolland’s quest to lift web sales from £400 million to at least £800 million by 2013/14.
Stocks on the back foot included Essar Energy off 5.5p to 528p, Eurasian Natural Resources slipped 15p to 1029p and Kazakhmys down 9p at 1622p.
Some of the stocks to make progress in a strong session on Monday gave back a slice of their gains, with chip designer Arm Holdings off 16p at 595p and Cairn Energy, down 10.4p to 425p.
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