London open: Stocks boosted by banks after BoE's stress test results

UK stocks rebounded on Thursday, supporting by banking stocks after the Bank of England’s stress tests showed Britain’s biggest lenders were strong enough to survive another recession.

Royal Bank of Scotland, Lloyds Banking Group, Barclays and Standard Chartered were among the top risers on the FTSE 100 after passing their annual stress tests. Banks’ financial strength were tested against the possibility of a crash in China and emerging markets.

Alongside the stress test results the Financial Stability Report was also released. In the report the BoE asked banks to hold as much as £10bn extra capital as a shield against any future financial crisis.

Banks will be required to have a so-called counter-cyclical capital buffer (CCB) of 1% during normal times.

The banking sector as a whole is now expected to hold high-grade tier one equity capital of 13.5% of risk-weighted assets by 2019, up from the current 13%.

Elsewhere, Chinese manufacturing data came in mixed. The official purchasing managers’ index fell unexpectedly to 49.6 in November from 49.8 the previous month. A reading below the 50-mark indicates contraction in the sector while a level above suggests expansion.

Caixin’s PMI on China manufacturing, however, rose to 48.6 in November from 48.3 in October, surprising analysts’ who had expected no change.

Markit’s final reading on Eurozone manufacturing PMI was confirmed at 52.8 in November, as expected, compared to 52.3 in October.

Still to come, manufacturing PMIs in the UK and the US will be released.

On the company front, Petra Diamonds jumped after buying an interest in the Kimberley Mines in South Africa from De Beers Consolidated Mines Proprietary Ltd, in a consortium with Ekapa Mining for around $7.2m.

Merlin Entertainments gained after it confirmed it is likely to end its rollercoaster year on a stable footing with full year profit forecasts expected to meet lowered expectations despite the continued significant weakness at Alton Towers since the crash on its Smiler ride in June.

Market Movers

FTSE 100 (UKX) 6,390.90 0.55%
FTSE 250 (MCX) 17,475.25 0.31%
techMARK (TASX) 3,230.68 0.00%

FTSE 100 - Risers

TUI AG Reg Shs (DI) (TUI) 1,138.00p 3.27%
Royal Bank of Scotland Group (RBS) 310.90p 2.81%
Lloyds Banking Group (LLOY) 74.96p 2.74%
BHP Billiton (BLT) 818.10p 2.66%
Barclays (BARC) 229.10p 2.64%
Smith & Nephew (SN.) 1,149.00p 2.13%
Taylor Wimpey (TW.) 198.70p 2.11%
Berkeley Group Holdings (The) (BKG) 3,275.00p 1.99%
Fresnillo (FRES) 728.00p 1.82%
Standard Chartered (STAN) 567.10p 1.78%

FTSE 100 - Fallers

Babcock International Group (BAB) 1,048.00p -2.15%
Morrison (Wm) Supermarkets (MRW) 150.60p -1.25%
Centrica (CNA) 215.50p -1.19%
Meggitt (MGGT) 384.10p -0.93%
Old Mutual (OML) 207.10p -0.91%
Shire Plc (SHP) 4,607.00p -0.84%
Aberdeen Asset Management (ADN) 316.90p -0.78%
Sainsbury (J) (SBRY) 252.30p -0.59%
BAE Systems (BA.) 513.50p -0.58%
Rolls-Royce Holdings (RR.) 603.00p -0.58%

FTSE 250 - Risers

Petra Diamonds Ltd.(DI) (PDL) 69.70p 8.65%
Home Retail Group (HOME) 111.00p 7.87%
Tullow Oil (TLW) 203.00p 3.36%
Northgate (NTG) 412.00p 3.23%
Petrofac Ltd. (PFC) 848.50p 2.85%
Poundland Group (PLND) 220.70p 2.32%
Serco Group (SRP) 112.80p 2.08%
Ophir Energy (OPHR) 100.50p 2.03%
Acacia Mining (ACA) 177.00p 1.96%
Drax Group (DRX) 229.50p 1.95%

FTSE 250 - Fallers

Sophos Group (SOPH) 262.30p -7.51%
CLS Holdings (CLI) 1,771.00p -4.27%
AO World (AO.) 145.50p -2.35%
SSP Group (SSPG) 307.20p -2.26%
Euromoney Institutional Investor (ERM) 912.00p -1.94%
Weir Group (WEIR) 1,181.00p -1.75%
Kaz Minerals (KAZ) 99.20p -1.68%
OneSavings Bank (OSB) 378.60p -1.59%
IP Group (IPO) 235.40p -1.55%
Computacenter (CCC) 805.00p -1.53%