FTSE 100 climbs as banking stocks boosted by Trump regulation plans
Banking stocks pulled the FTSE 100 higher as investors cheered news of Donald Trump's plans for a regulatory rollback for the financial industry.
London's blue chip index ended the day higher by 0.67% or 47.55 points at 7,188.3, topped by shares in Barclays up 7.5p to 228.85p, Royal Bank of Scotland (RBS) up 6p to 228.5p, and Lloyds Banking Group up 0.96p to 65.85p.
Other financial firms rose, including Prudential up 48p to 1,600.5p and Hargreaves Lansdown climbed 23p to 1,381p.
It comes after US president Donald Trump signalled he would sign an executive order demanding a review of the 2010 Dodd-Frank financial oversight law, which aimed to rein in reckless financial firms following the 2008 banking crisis.
Jasper Lawler, a senior market analyst at London Capital Group, said: "Since Dodd-Frank was introduced, banks have devoted a lot more capital towards compliance and have had to decrease leverage, both of which are a direct hit to profitability.
"If Dodd-Frank is watered down, that's a direct boost to the bottom line for banks."
Sterling was trading lower after data showed that output in Britain's powerhouse service sector eased back last month as cost pressures continued to bite.
The closely-watched Markit/CIPS purchasing managers' index (PMI) reached 54.5 in January, down from 56.2 in December and below economists' forecasts of 55.8. That was the slowest rise since October.
The pound was nearly flat against the US dollar at 1.251 and fell 0.36% versus the euro to 1.160.
Across Europe, the French Cac 40 and German Dax rose 0.65% and 0.2%, respectively.
In oil markets, the prospect of fresh US sanctions on Iran pushed Brent crude prices higher by around 0.3% to 56.90 US dollars per barrel (£45.53).
In UK stocks, mining stocks fell as investors fretted about policy tightening in China. Glencore fell 15.5p to 309.5p, while Rio Tinto dropped 124.5p to 3,390.5p, and Anglo American sunk 45.5p to 1,332p.
RBS shares rose 6p to 228.5p as investors focused on the US regulatory rollback, despite news that the bank had been hit with an 85 million dollar (£68 million) fine by US authorities over financial trading manipulation.
Johnston Press shares soared 1.75p to 17.5p after the newspaper publisher said it expects 2016 earnings to be in line with forecasts despite a difficult trading period in the wake of Brexit. It said full-year revenues fell 6%.
Maintenance group Homeserve saw shares drop 2p to 597.5p after spending £37 million on stakes in Checkatrade and Habitissimo, marking its entrance into the home improvement market.
The biggest risers on the FTSE 100 were Barclays up 7.5p to 228.85p, Prudential up 48p to 1,600.5p, Mediclinic International up 23.5p to 788.5p, and Sainsbury up 7p to 264.8p.
The biggest fallers on the FTSE 100 were Glencore down 15.5p to 309.5p, Rio Tinto down 124.5p to 3,390.5p, Anglo American down 45.5p to 1,332p, and Antofagasta down 27.5p to 813p.