Banks led a rally on London's leading shares index yesterday after taxpayer-backed Lloyds Banking Group's first quarter trading update cheered investors.
Lloyds shares surged 8% after a robust underlying performance boosted its recovery hopes and gave a lift to the rest of the heavily weighted banking sector.
The FTSE 100 Index rose more than 1%, or 74.5 points to 5812.2, after stronger than expected US manufacturing data buoyed hopes the world's biggest economy.
The Institute for Supply Management's index of manufacturing activity increased to 54.8 in April – its highest level since June – renewing traders' confidence after last week's disappointing GDP growth.
The Dow Jones Industrial Average in the US was up 0.8% as the London market closed.
The pound was down against the dollar at 1.62 after the greenback was lifted by the manufacturing figures, which made another round of quantitative easing less likely. But sterling was up at 1.23 against the euro.
In London, Lloyds was the biggest blue chip riser, 2.6p higher at 33.6p, after it revealed pre-tax profits of £288 million for the first three months of the year. Chief executive Antonio Horta-Osorio unveiled progress with his strategic review, including targets to sell-off chunks of the international business.
Royal Bank of Scotland, which is due to announce first quarter figures on Friday, was 1p higher at 25.3p, while Barclays was 8p higher at 226.2p.
Imperial Tobacco was also among the biggest risers after it reported encouraging momentum in revenues over the second quarter. With half-year profits 3% higher at £1.5 billion, shares were up 92p to 2556p, or 4%.
However, BP's shares were 3.7p lower at 441.3p after it announced profits of $4.8bn (£2.95bn) in the first quarter, compared with the $5bn expected by City analysts.
The miss came after production targets were affected by billions of pounds of asset sales in the wake of the Gulf of Mexico disaster, in sharp contrast to Royal Dutch Shell, which beat forecasts with its first quarter profits last week.
The recent volatility in shares of fund manager Man Group continued with a decline of 5.7p to 97.8p, after it revealed funds under management fell nearly 15% to $59bn (£36bn) at the end of the first quarter.
Retailers Next and Marks & Spencer were down 33p to 2896p and 0.7p to 357.7p respectively amid fears the recent bad weather has washed out high street sales.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article