Royal Bank of Scotland leads UK banks higher

Equities markets in Europe were higher Monday, on the first day of trade in the new year, helped by data on December manufacturing in China, the U.K. and the United States as all reported December activity up at the fastest pace in nearly two years for China to three years for the US.

The FTSE 100 was up 1.62 percent to 5,500.34 in London, while the FTSE 250 added 2.18 percent to 9,510.11.

Banks were higher, led by Royal Bank of Scotland (LSE: RBS), which added 9.93 percent for the best performance in London on the session after it received a broker upgrade to “outperform”.

Miners were higher as metals prices climbed, led by gold miner Petropavlovsk (LSE: POG) with a gain of 8.28 percent.

The energy sector was higher as Cairn Energy (LSE: CNE) added 6.73 percent after it said it had acquired another oil rig for its Greenland project, which will allow more wells to be drilled there.

Property developers and homebuilders had a rougher time of it.

Developer Hammerson (LSE: HMSO) dropped 2.78 percent to lead decliners in a mixed sector and was the worst performer on the 100, followed by British Land Co (LSE: BLND) with a decline of 2.75 percent, while over on the 250, Savills (LSE: SVS) was down 1.88 percent.

The best performance in the real estate sector came from Daejan Holdings (LSE: DJAN), which added 5.16 percent during the session.

Among homebuilders, Bovis Homes Group dropped 3.98 percent for the worst performance of the day in London and on the 250, while Bellway (LSE: BWY) fell 3.18 percent.

The best performer on the 250 was SVG Capital (LSE: SVI), which gained 9.92 percent.

The FTSE Eurofirst 300 was up 1.27 percent to 1,059.05 while the Dax added 1.53 percent to 6,048.3, the IBEX was 1.72 percent higher to 12,145.1 and the CAC-40 gained 1.97 percent to 4,013.97, with the CAC-40 and the Dax each seeing only 3 decliners on the session.

Most markets in the Asia-Pacific region were higher, but the Shanghai Composite dropped 1.02 percent to 3,243.76 despite news that China’s manufacturing activity was up in December as stricter rules regarding taxes and mortgages hurt the property sector.

Other decliners included the Straits Times Index, which was down 0.11 percent to 2,894.55 while the Hang Seng fell 0.23 percent to 21,823.28 in Hong Kong.

In Tokyo, the Nikkei 225 added 1.03 percent to 10,654.79, its best close in 15 months while the Topix index was 0.9 percent higher to 915.75 and the Mothers market was up 0.65 percent to 418.91.

The gains came on a weaker yen, the good news on manufacturing from China, as well as on good employment news from the US, where the Labor Department reported late last week that in the week ending 26 December, first time jobless claims dropped by 22,000.

Japan Airlines (TYO: 9205) gained 31 percent on the news that the Development Bank of Japan, run by the government, will double the air carrier’s credit line to ¥200 billion.

Meanwhile, All Nippon Airways (TYO: 9202) added 5.2 percent on reports that it could assume JAL’s international business.

Also gaining in the region were Australian markets, where the S&P/ASX200 was up 0.12 percent to 4,876.2 and the Sydney Ordinaries added 0.15 percent to 4,889.8.

Taiwan’s Taiex was 0.24 percent higher to 8,207.85 while the Kospi added 0.79 percent to 1,696.14 in South Korea and India’s Sensex gained 0.54 percent to 17,558.73.

In midday trade in New York, the Dow Jones Industrial Average was up 1.55 percent to 10,590.15 while the Nasdaq Composite had added 1.72 percent to 2,308.27 and the S&P 500 was 1.64 percent higher to 1,133.37.

Prices for crude oil and metals were higher in New York trade.

Discuss this in the Finance Markets forums

Story link: Royal Bank of Scotland leads UK banks higher