FTSE rallies to top two-week high

The FTSE 100, which had slipped below the 5200 mark, rallied late on Friday afternoon to top a two-week high.

At one stage in early morning the index was trading at the 5185 before the midday come back restored the index to exceed yesterday's highs.

Hilary Cook, investment director at Barclays Stockbrokers, said: "It's encouraging that it (the FTSE 100) has held above 5,200 points".

She said the feeling was that this could be the beginning of a long-expected rally, and added: "The accounting concerns and the problems with Enron have held the market back, but the economic data is improving and in general the corporate news has been good in the UK and the US."

On Thursday beleaguered banking stocks have helped the FTSE shed 5.7 points and leave it to face the possibility of trading under the 5200 point mark.

By Friday lunchtime the FTSE 100 Index stood at 5203 following more negative news in the market. Dwindling bank stocks accounted for 10 points of the fall as Lloyds TSB announced they would cut 3000 jobs. This was an unexpected turn as stocks in the bank were up 1.7 per cent as the city prepared to hear better news.

However, Lloyds is poised to cut 5000 jobs and create 2000 in a shake-up of staff after its full-year profits results showed that the bank had suffered an eight per cent loss. The market responded as Lloyds shares dipped five per cent, or 34.5p to 740p, following the announcement. Barclays also fell 62p at £21.08, Royal Bank of Scotland lost 24p at £17.76, HBOS was 21p weaker at 862p, and Abbey National was 20.5p lower at £10.49.

This contrasts the comparative enthusiasm of investors at the start of the week as bank shares propped up the slipping blue chips and added 22 points to the index.

(GMcG)