Barclays lifts FTSE higher
Fiona Cincotta February 12, 2013 4:35 PM
<p>European markets saw a slightly negative start to the trading day as investors were cautious following news that North Korea had carried out its third […]</p>
European markets saw a slightly negative start to the trading day as investors were cautious following news that North Korea had carried out its third nuclear test overnight. By mid morning, however, the FTSE had at least managed to turn positive, finding support from the banking sector.
Barclays has impressed the market this morning, unveiling its ‘Project Transform’ alongside its full-year results. Pre-tax profits of £246 million were reported – sharply lower than the £5.9 million reported in 2011. This highlights the full extent of the damage caused by compensating the victims of the mis-selling scandal, however, the company’s cost performance for the year 2012 has been praised.
Barclays has also confirmed that it will cut at least 3700 jobs in 2013 as part of a continued strategic overhaul to reduce costs yet further. It will cut at least £2 billion from its annual cost base. The company’s share price was up over 4.4% in early trading as the markets were pleased to see the bank moving forward after a year marred by Libor manipulation, potential illicit payments to the Middle East and mis-selling compensation.
Sector peers Lloyds and Royal Bank of Scotland also gained on the back of Barclays, with their shares trading up 3.3% and 1.7% respectively. On the downside, miners posted loses in London as they tracked metal prices lower; Antofagasta dropped 1.5%, BHP Billiton fell 0.9% and Kazakhmys was down 1% by mid morning trading.
Looking at broader Europe, EU ministers concluded their meeting yesterday by highlighting their concern over the euro’s strength. This seems to be a topic which, along with currency wars, could be a central theme for much of 2013. The president of the Eurogroup who oversees the agenda of the monthly meetings stated that the forum for further discussion on the matter should be the G-20 meeting in Moscow on Friday.
Economic data is in short supply today. The UK inflation figures came in as expected at 2.7%, still 0.7% above target and unchanged for four months. This afternoon, ECB President Draghi will meet with the Prime Minister of Spain for a press conference.
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