European banking shares were in demand after regulators gave the sector four more years to build up their reserves in the wake of the financial crisis.
Barclays (BARC.L) raced to the top of the FTSE 100, 10.6p or 3.8% higher at 287.5p after the Basel Committee of banking supervisors announced on Sunday that they would make it easier for lenders to meet a measure of strength known as the 'liquidity coverage ratio' and gave them until 2019 to comply with it.
However, the FTSE 100 dipped nearly 12 points, or 0.2%, to 6,078 as profit taking in mining shares offset the banking gains. Mining shares were among the biggest risers on Friday after the US employment figures encouraged investors to take a positive view on the global economy.
Silver miner Fresnillo (FRES.L) was the biggest faller on the blue chip index, shedding 33p or 1.8% to £17.77.
It was a similar story in Europe where the Euronext 100 index dipped a point to 696.
In London it was a bad start for the week for Rolls Royce (RR.L) which fell 14p or 1.5% to 904p after the Sunday Times gave details of the Serious Fraud Office’s inquiry into allegations of bribery in China.
Centrica (CNA.L) also gave up 4.5p or 1.3% after the paper claimed that its chief executive Sam Laidlaw had sacked Phil Bentley, boss of British Gas, which it owns. Reports today say the energy company will announce his departure alongside the culmination of a strategic review at its full-year results next month.
Morrisons (MRW.L) edged 0.3% or 0.8p higher to 257.7p after chief executive Dalton Philips said he was ‘looking very closely’ at launching an online food operation. The lack of online deliveries is one of the factors holding back the country’s fourth largest supermarket. Christmas trading has been disappointing with like for like sales down 2.5% in the six weeks to 30 December, worse than the 2.1% fall in its third quarter.
Kate Calvert, retail analyst at Seymour Pierce, maintained her ‘reduce’ stance saying ‘the failure of a sales recovery despite soft comparables [with last year] is more concerning for FY14 [2014 calendar year] and it is becoming more inevitable that profits will decline again year-on-year.’
Tesco (TSCO.L), which reports its trading statement on Thursday, firmed 0.6p to 257.5p.
Pearson (PSON.L) shed 4p or 0.3% to £12.18 after it announced it would close its UK adult training business at a cost of £120 million, saying the business model was not longer ‘sustainable’.
Bumi (MUMIP.L) gained 4.6% or 12.4p to 281p after the troubled Indonesia focused coal miner said it would review its capital expenditure and defer some expansion plans.
Easyjet (EZJ.L) rose 14.5p or 1.7% to 835.5p after the budget airline reported passenger numbers in December were up 4.9% on a year ago.
A raft of trading statements lifted smaller company shares.
H&T Group (HTGR.L) gained 7.4p or 2.6% to 290p after the pawnbroker said it expected full-year results in March to be in line with expectations.
Soft drinks maker Nichols (NICL.L) fizzed 35p or 4.3% higher to 860p after expecting full-year profits to beat expectations.