Banks help FTSE 100 pare losses due to weak commodity prices


© Reuters. FILE PHOTO: Pedestrians leave and enter the London Stock Exchange in London

By Devik Jain

(Reuters) – London’s FTSE 100 pared early losses on Monday as a surge in banks following a report that the central bank was considering allowing dividend payments again helped offset losses in energy and mining stocks due to weak commodity prices.

Shares in Barclays (L:), HSBC (L:) and Lloyds Banking (LON:) Group (L:) rose about 0.5% after The Times newspaper reported the Bank of England (BoE) and commercial banks are “bartering” a deal to allow banks to make shareholder payouts.

Having declined as much as 1.3% in early trading, the FTSE 100 index () was down 0.3%, while the domestically-focussed mid-cap FTSE 250 index () lost 0.2% as travel and leisure () and industrial () stocks fell.

European markets were broadly weighed down by fears that a resurgence in coronavirus cases would hamper economic recovery as the government tightens restrictions on activity.

“There’s fear that we get a long winter of restrictions across Europe that hobbles consumer demand and investor confidence,” said Neil Wilson, chief market analyst for Markets.com.

After a stimulus-backed sharp rally from pandemic lows, the FTSE 100 has been trading in tight ranges since June due to Brexit-related uncertainty and concerns over coronavirus curbs.

AstraZeneca Plc (L:) rose 1.0% after the drugmaker resumed the U.S. trial of its experimental COVID-19 vaccine and said the vaccine being developed by the University of Oxford produced a similar immune response in both older and younger adults.

The wider sectoral index () added 0.9%.

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Educational publisher Pearson Plc (L:) added 3.5% after UBS upgraded the stock to “buy” rating.

Coca-Cola (NYSE:) European Partners (CCEP) (L:) surged 8.5% after the soft drink bottler made a buyout offer of $6.6 billion for its Australian peer Coca-Cola Amatil Ltd (AX:).

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