FINANCIAL stocks surged yesterday after the Government unveiled details of its scheme to insure toxic debts worth hundreds of billions of pounds.
Lloyds Banking Group and Royal Bank of Scotland both posted gains of more than 20% as investors reacted positively to the extra support, and speculated there was now less chance of further nationalisations.
With US stocks in positive territory by the time of London’s close, the Footsie finished 1.7% higher, up 66.7 points at 3915.6.
RBS, which is putting £325bn of assets into the scheme, jumped 25% or 5.9p to 29p, despite record UK corporate losses of £24.1bn.
Elsewhere in the banking sector, Barclays cheered 7.4p to 113p and HSBC gained 34.5p to 527p as financial stocks improved across the board.
Legal & General was one of the biggest beneficiaries with an improvement of 9.6p to 44.5p. On a busy day for corporate results, RSA Insurance rallied strongly after operating profits beat market hopes.
The biggest Footsie risers were Lloyds Banking Group, up 17.6p at 75p, Legal & General, ahead 9.6p at 44.5p, Royal Bank of Scotland, up 5.9p at 29p, and Old Mutual, ahead 6.4p at 47p.
The biggest fallers were Hammerson, down 103p at 231p, Randgold Resources, off 165p at 3030p, Capita, down 16p at 657.5p, and Royal Dutch Shell, off 32p at 1523p.
