Heavyweight banks push FTSE 100 higher after BoE scraps dividend curbs

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imageStock Markets1 hour ago (Jul 13, 2021 17:20)

© Reuters. FILE PHOTO: A man shelters under an umbrella as he walks past the London Stock Exchange in London, Britain, August 24, 2015. REUTERS/Suzanne Plunkett/File Photo

By Shashank Nayar

(Reuters) – London’s FTSE 100 ended on a quiet note on Tuesday amidst weakness in travel and energy stocks as a jump in coronavirus infections raised worries about re-openings, while banks gave up their session gains to end lower.

Banks ended 0.9% lower after initially adding over 2%, weighing on the FTSE 100, after the Bank of England scrapped pandemic-era curbs on dividends for top lenders with immediate effect.

The blue-chip FTSE 100 index was flat, with financial services company Natwest Group being the top loser, while energy major BP (LON:BP) posed the top drag on the index. Travel stocks dropped 1.0%.

“UK banks aren’t U.S. banks and anyone expecting a big increase in payouts needs to temper their optimism, which probably helps explain why, despite an initial move higher, the bulk of, if not all of, today’s gains have disappeared,” said Michael Hewson, senior market analyst at CMC Markets.

The mid-cap FTSE 250 index climbed 0.1% with retailer Howden Joinery Group the top gainer on upbeat earnings updates as its share hit record highs.

The FTSE 100 has gained 10.6% 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 is currently trading near record highs — after a recent jump in cases of a coronavirus variant sparked fears of a prolonged economic recovery.

Among stocks, UK commercial property firm British Land Co Plc (LON:BLND) fell 1.6% after it said it did not expect to grant further rent concessions to its tenants this quarter as the easing of coronavirus restrictions had boosted its trading.

BP Plc dropped 1.1% after it said it would buy the entire ownership of its Thorntons joint venture to expand its presence in the U.S. fuels and convenience retail business.

FTSE 100 underpeform stoxx 600 https://fingfx.thomsonreuters.com/gfx/mkt/rlgvdrbgdvo/FTSE%20100%20underpform%20stoxx%20600.png

FTSE 100 muted as heavyweight banks reverse course; virus worries persist

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