Member access

4-Traders Homepage  >  News

News

Latest NewsCompaniesMarketsEconomy & ForexCommoditiesHot NewsMost Read NewsRecomm.Business LeadersVideosCalendar 

LONDON MARKETS: Barclays Rally Leads London Stocks Higher

02/12/2013 | 02:07pm US/Eastern
Recommend:
0

By Sara Sjolin, MarketWatch

LONDON (MarketWatch) -- Shares of Barclays PLC led U.K. stocks higher on Tuesday after the bank said it would cut costs as part of a strategy overhaul.

The FTSE 100 index rallied 1% to close at 6,338.38, adding to 0.2% gain from Monday.

Barclays (>> Barclays PLC) jumped 8.6% as the bank announced a strategy to refocus investments in Africa, the U.S. and the U.K., in a plan that will slash at least 3,700 jobs, mainly from its investment bank activities. The cost-cutting is expected to shave off 1.7 billion pounds ($2.66 billion) from the bank's cost base down to around GBP16.8 billion by 2015.

Additionally, Barclays posted a net loss for 2012 of GBP1.04 billion, mainly due to a noncash charge from the increasing value of its own debt.

"Today's numbers are solid and the strategic outlook offers a beacon of light in the sector gloom. We remain buyers," said Ian Gordon, analyst at Investec Securities, in a note.

"We welcome the continuing attack on excessive [investment bank] pay. In this division, [former Chief Executive Bob Diamond] cut costs from GBP8.3 billion in 2010 to GBP7.3 billion in 2011. [CEO] Antony Jenkins has achieved a reduction to GBP7.2 billion in 2012 (including GBP0.2 billion of the LIBOR settlement), and we expect further significant progress," he added.

Other U.K. banks followed Barclays higher, with shares of Lloyds Banking Group PLC up 5.1%, Royal Bank of Scotland Group PLC 4.1% higher and sector heavyweight HSBC Holdings PLC (>> HSBC Holdings plc) up 1.5%.

On the data front in the U.K., figures from the Office for National Statistics. showed the consumer prices index--the government's target measure for inflation--rose 2.7% in January, marking the fourth consecutive month at that level.

"Whilst CPI inflation, overall, has remained unchanged for four months now, we do see near term pressures lying to the upside of this recent range. We continue to judge that the knock-on effect of last summer's U.S. droughts are likely to feed through to higher food prices as we head further through this year," said Victoria Clarke, economist at Investec Securities in a note.

"We judge that these pressures are likely to push CPI inflation above 3% by the middle of this year," she said.

Also on the rise in the U.K., shares of International Consolidated Airlines Group SA picked up 2.6%. The company said Iberia has started the formal collective redundancy process over 3,807 jobs as part of a transformation plan to implement structural changes in efforts to return to profitability.

On a more downbeat note in London, mining firms posted losses, even as most metals prices were on the rise.

Antofagasta PLC fell 1.1%, BHP Billiton PLC (>> BHP Billiton Limited) dropped 0.4% and Kazakhmys PLC lost 0.5%.

Shares of BAE Systems PLC dropped 1.8%, as J.P. Morgan Cazenove initiated coverage of the defense and aerospace firm with a neutral rating. The analysts said it believes BAE faces major structural problems and is likely to underperform the sector over the next 12-24 months.

Reed Elsevier PLC fell 0.9%, as HSBC cut the academic publisher to neutral from underweight.

Subscribe to WSJ: http://online.wsj.com?mod=djnwires

Stocks mentioned in the article : Barclays PLC, HSBC Holdings plc, BHP Billiton Limited
Recommend :
0
React to this article
Latest news
Date Title
<1m ago DIVERSE INCOME : Notes Progress In Investing C Share Pool
<1m ago UKAI : Tapi River front re-opened for public
<1m ago TORONTO DOMINION BANK : TD Bank's outgoing CEO urges tighter Canada lending rules
<1m ago VIDEOLOGY : Revenue Expected to Approach $300 Million in 2014
<1m ago RESEARCH AND MARKETS : Global Saw Blade Industry Report 2014
<1m ago VANTAGE DELUXE WORLD TRAVEL : Captures 2014 Silver Magellan Award by Travel Weekly
2m ago WHOLE FOODS MARKET : N.H. businesses crowd Whole Foods supplier summit
2m ago CRISIL : Car owners will need to use Diesel cars for six years to justify premium
2m ago FIGO VENTURES : Ford introduces new-look Figo
2m ago Realtors(R) President Calls on Policy Makers to Protect Middle Class Homeownership at Bipartisan Policy Center Housing Summit
Latest news
Advertisement
Hot News 
DIXONS CARPHONE : HELPING HANDSET ; Dixons jobs for Phones4u staff in its stores as ex-boss warns of price rises
THALASSA : Revenue Jeopardised By EU Sanctions Against Russia
CRANEWARE : Ups Dividend As Profit Rises In Improving US Market
GLIMCHER REALTY : Other Events (form 8-K)
TLA WORLDWIDE : *numis raises tla worldwide price target to 55 (52) pence - 'buy'
Most Read News
1d ago GENERAL MOTORS : Exclusive: U.S. safety chief raps GM's 'flawed' culture on recalls
1d ago APPLE : releases tool to remove free U2 album
1d ago CONVERSANT : SHAREHOLDER ALERT: Brower Piven Announces Investigation Of Conversant, Inc. In Connection With The Proposed Sale Of The Company To Alliance Data Systems Corporation
1h ago Orange offers to buy Spain's Jazztel for 3.4 bln euros
1d ago Germany's ZF to take over TRW Automotive for $13.5 billion
Most recommended articles
5m ago Freshfields recruits veteran M&A partner from Shearman & Sterling
13m ago TSX edges lower as investors eye Fed meeting
13m ago EXCLUSIVE - UBM NEAR $900 MILLION DEAL FOR TRADE SHOW RIVAL ADVANSTAR : sources
17m ago Mitsubishi leads $600 million investment in Indonesia plant, new car
18m agoDJMARKET SNAPSHOT : U.S. Stocks Turn Higher; Fed Meeting In Focus
Dynamic quotes  
ON
| OFF