Banks help FTSE 100 pare losses due to weak commodity prices

FILE PHOTO: Signage is seen outside the entrance of the London Stock Exchange in London, Britain

London’s FTSE 100 pared early losses on Monday as a surge in banks following a report that the central bank was considering allowing dividend payments again helped offset losses in energy and mining stocks due to weak commodity prices.

Shares in Barclays BARC.L, HSBC HSBA.L and Lloyds Banking Group LLOYL.L rose about 0.5% after The Times newspaper reported the Bank of England (BoE) and commercial banks are “bartering” a deal to allow banks to make shareholder payouts.

Having declined as much as 1.3% in early trading, the FTSE 100 index .FTSE was down 0.3%, while the domestically-focussed mid-cap FTSE 250 index .FTMC lost 0.2% as travel and leisure .FTNMX5750 and industrial .FTNMX2720 stocks fell.

European markets were broadly weighed down by fears that a resurgence in coronavirus cases would hamper economic recovery as the government tightens restrictions on activity.

“There’s fear that we get a long winter of restrictions across Europe that hobbles consumer demand and investor confidence,” said Neil Wilson, chief market analyst for Markets.com.

After a stimulus-backed sharp rally from pandemic lows, the FTSE 100 has been trading in tight ranges since June due to Brexit-related uncertainty and concerns over coronavirus curbs.

AstraZeneca Plc AZN.L rose 1.0% after the drugmaker resumed the U.S. trial of its experimental COVID-19 vaccine and said the vaccine being developed by the University of Oxford produced a similar immune response in both older and younger adults.

The wider sectoral index .FTNMX4570 added 0.9%.

Educational publisher Pearson Plc PSON.L added 3.5% after UBS upgraded the stock to “buy” rating.

Coca-Cola European Partners (CCEP) CCEPC.L surged 8.5% after the soft drink bottler made a buyout offer of $6.6 billion for its Australian peer Coca-Cola Amatil Ltd CCL.AX.

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