Banks push FTSE 100 higher after BoE scraps dividend curbs
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London’s FTSE 100 rose on Tuesday as heavyweight banks jumped after the Bank of England scrapped dividend curbs, but worries about rising coronavirus infections capped gains.
Banks added 2%, the most among all sectors, after the central bank scrapped pandemic-era curbs on dividends from HSBC, Barclays and other top lenders with immediate effect.
The blue-chip FTSE 100 index rose 0.3%, with HSBC , Barclays and Natwest Group being the top boosts, gaining between 0.5% and 1.4%.
“The relaxation of these restrictions is also an acknowledgement that the sector is in pretty solid financial shape and marks an interesting contrast with the European Central Bank, which signalled caution on a quick return to big dividends in the eurozone,” said Danni Hewson, an analyst at AJ Bell.
Base metal and precious metal miners , and energy stocks, tracked gains in commodity prices. Rio Tinto, Anglo American, BHP Group, and Royal Dutch Shell were among the highest gainers on the FTSE 100.
The mid-cap FTSE 250 index climbed 0.2%, with retailers Dr Martens and Howden Joinery Group being among the top gainers.
British retailers climbed 0.5% after they reported a record annual increase in sales for the three months to the end of June.
The FTSE 100 has gained 10.5% so far this year, but has been largely range-bound near its 7,100-mark since June. It has underperformed the wider European index — which currently trades near record highs — after a recent jump in cases of a coronavirus variant sparked fears of a prolonged economic recovery.
Among stocks, British Telecom gained 0.5% after Italy’s competition watchdog said it had cleared, with conditions, Telecom Italia’s proposed acquisition of some of the British telecom group’s business units.
UK commercial property firm British Land Co Plc jumped 1% after it said it had seen a notable improvement in activity across its businesses after the lifting of lockdowns.
