FTSE shakes off bank levy move


The FTSE 100 fell 6.8 points to 6044.1at midday

Chancellor George Osborne’s move to increase the levy on banks to £2.5 billion this year has had little impact on leading shares in the sector.

The likes of Barclays and Royal Bank of Scotland, who are expected to help the government raise an additional £800 million from the balance sheet tax, moved in line with the FTSE 100 Index, which was down 6.8 points at 6044.1.

European markets were lower after Germany, the continent’s largest economy, reported weak manufacturing figures.

In London, 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 18p at 593p and Cairn Energy 11p lower at 424.4p.

Marks & Spencer’s success in poaching a senior Tesco executive to lead its internet expansion caused the retailer’s shares to jump more than 2%, up 8.6p to 368.4p. The appointment of Laura Wade-Grey, which was announced after the market closed on Monday, should help chief executive Marc Bolland’s quest to lift web sales from £400 million to at least £800 million by 2013/14.

Bank shares were closely watched after Mr Osborne’s announcement but the impact was limited as Royal Bank of Scotland dropped 0.1p to 44.1p and Barclays fell 1.1p to 311.7p although Lloyds Banking Group edged 0.1p higher to 64.6p.

In corporate results, BG Group shares added 19.5p to 1459.5p after fourth quarter figures exceeded market expectations as higher energy prices helped the exploration giant offset a drop in oil and gas production. BG also upgraded its long-term production targets, notably for Brazil and the United States.

Thomas Cook shares rose 2% despite its warning that political unrest in travel hotspots Egypt and Tunisia would hit second-quarter profits by around £20 million. Analysts said the rest of winter update offered encouragement, while the company has looked to offset the North African pressure by switching customers to different holiday destinations. Shares rose 3.3p to 196.8p.

Meanwhile, supermarket household products supplier McBride fell 7% after it announced a 26% decline in half-year operating profits to £18.8 million and said it expected further commodity price pressures going forward.

It has tried to offset the input costs through restructuring initiatives and price rises but shares in McBride were down 11.2p to 137p as it said it expected a further £7 million of cost increases in the first half of 2011.

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