FTSE 100 up as financials gain on UK's move to reform sector

UK’S blue-chip FTSE 100 index edged higher on Friday (Dec 9) as financial stocks rose on a government move to overhaul the sector and maintain the City of London as one of the most competitive financial hubs in the world.

The FTSE 100 and the domestically focused FTSE 250 mid-cap index were up 0.1 per cent each by 10:45 GMT, although they are on track to end the week lower.

The investment banking and brokerage services index rose 0.6 per cent and banks 0.2 per cent after Britain set out 30 measures to overhaul the financial sector on Friday, including a repeal of “burdensome” EU rules that the government says will unlock investments.

“It’s all part of the UK trying to find its identity in a post-Brexit world. The UK has become very worried recently that it would be left out after Amsterdam and France overtook the UK in terms of trading activity,” said Giles Coghlan, chief market analyst at HYCM.

Energy stocks fell 1.2 per cent and were the biggest drag on the main index due to subdued crude prices.

“There are so many different drivers in the energy market that it’s being pushed and pulled continuously,” Coghlan said.

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“First there’s Covid restriction in China, which it has said will be reversed. Then there’s the Russian oil price cap, and adding to all of this there are fears that we’re heading into a recession. It’s no surprise that people are struggling to understand the energy market now.”

All eyes will be on the Bank of England next week, as it is expected to raise rates by 50 basis points even though fears of a recession loom.

Among stocks, Man Group jumped nearly 6 per cent after the investment management firm announced a share buyback programme of up to US$125 million. REUTERS