FTSE 100 up 1.8% in early trading

Thursday 22nd January 2009

The FTSE 100 broke ranks with recent gloom and was up in early trading this morning.

At 9:09 GMT the index stood at 4,134.64 – a rise of 74.76 points or 1.84 per cent.

The gains followed those in New York last night – with the Dow Jones up 3.51 per cent to 8228.10 and gains recorded for the banks.

Citigroup was up 31.07 per cent, Bank of America gained 30.98 per cent and JP Morgan Chase rose 25.10 – as confidence returned to banks along with a little bottom feeding.

The banking optimism was matched in London this morning.

Royal bank of Scotland was up 18.40 per cent to 14.80p, and Lloyds Banking gained 16.68 per cent to 52.60 – both still very depressed.

Schroders was up 10.66 per cent and Friends Provident rose 10.10 per cent.

BT led the drops – down 12.36 per cent – after announcing its global services was going to take a hit of £340 million due to "financial and contract reviews".

Supermarket chain Morrisons was down 3.03 per cent – despite outperforming rivals over Christmas.

Unilever was down 2.10 per cent.

Tom Hougaard at CityIndex cut a rather downbeat note on any hopes of a turnaround.

"It would be easy to proclaim that stocks like banks would do well today, after the strength on Wall Street, but unfortunately this particular group is dealing with a set of circumstance, which are so unique that guessing when a bounce would come has proven fruitless," he said.

"It is for this same reason that I think the stock market will be dead for many years going forward. But at least for today and in the days to come, we can enjoy some buying interest."

Sterling continued to suffer on the currency markets.

The pound was down 0.90 per cent against the dollar to $1.389 and down 0.82 per cent against the euro to €1.064 – as renewed fears of euro/pound parity returned.

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