Positivity regarding the US open has helped the FTSE overcome this morning's dip, and early performance from across the pond suggests the increase in investor sentiment is justified.
Despite this morning's drop to levels not seen since last Thursday, the FTSE 100 had returned to its opening levels by 11.30am (London time) – and this afternoon's trading only saw the blue-chip index continue to climb. By 4.30pm the FTSE stood at 5435 (+0.49%), as a surge in optimism regarding US trading overcame investors' lingering concerns regarding the validity of European banks' performance in stress tests carried out back in July.
Those stress tests continue to cast a shadow over the European banking sector, however, with EU Financial Markets Chief Michel Barnier suggesting more regular and rigorous testing would be an appropriate measure in order to prevent a future collapse. 'I am of the opinion that we will have to regularly conduct stress tests in the future,' Mr Barnier said.
The UK's Business Secretary, Vince Cable, has again added his voice to those calling for tough banking reform, commenting in the wake of Bob Diamond's appointment as Barclays' new Chief Executive on the dangers of 'this combination of the casinos and the traditional banks'.
Markets appear undaunted so far today by the prospects of tougher regulation or retail/investment splits, however, although Barclays has continued yesterday's downward trend to stand at 309.50p as of 4.30pm (London time), a drop of –1.43%. Royal Bank of Scotland and Lloyds have joined Barclays in the red, showing respective falls of –0.59% and –0.51%.
Today's biggest winner on the FTSE is chip designer ARM, benefitting from a price upgrade from UBS. The shift from 305p to 375p has combined with rumours that electronics giant Samsung is considering ARM technology for its upcoming smartphone and tablet devices. The FTSE's other top risers include miners Antofagasta, Xstrata and Kazakhmys, mirroring the index's recovery from this morning's lows to show +3.35%, +3.04% and +2.81% respective increases as at 4.30pm (London time).
BP's share price was also firmly in the black this afternoon, after the publication of its report into the recent Gulf of Mexico disaster laid blame on 'a sequence of failures' across 'multiple parties, including BP, Haliburton Co. and Transocean Ltd'. As at 4.30pm (London time) BP's value stood at 413.45p, an increase of +1.63%.
Across the Atlantic, Wall Street has opened strong – as investors had hoped – after a Portuguese sale of three-year and ten-year bonds showed high demand, reducing concerns over the eurozone's seemingly perpetually shaky sovereign debt. As at 4.30pm (London time), the US SPX 500 was up +0.94% to 1102, and the Dow was likewise in the black with a +0.80% climb to 10,423.
