By Barbara Kollmeyer, MarketWatch
MADRID (MarketWatch) -- London stocks rose to levels not seen in
around a week on Tuesday, driven by banks and more data confirming
the U.K. recovery.
The FTSE 100 index rose 0.4% to 6,760.84, after the index closed
slightly higher on Monday.
In the banking sector, Lloyds Banking Group PLC (LYG) rose
nearly 3% and HSBC Holdings PLC (HSBC) gained 1.9%. Royal Bank of
Scotland Group PLC (RBS) rose 1.3% and Barclays PLC (BCS) gained
1.3%.
Euro-zone data showed the annual rate of inflation fell across
the region and further below the European Central Bank's target in
December, prompting some speculation the central bank may need to
address falling prices, or maybe try to stimulate the economy
further with measures. Banks have been a key beneficiary of easy
money policy by central banks.
U.K. data showed new car sales surging 11% in 2013 versus 2012,
the best year since pre-recession 2007, said the U.K. Society of
Motor Manufacturers and Traders. Sales for December rose 24%, the
22nd straight monthly rise.
Oil prices rose Tuesday as a portion of the U.S. remained locked
in bitter cold, with BP PLC (BP) up nearly 1%.
Broker moves triggered action for several stocks. Shares of
Severn Trent PLC fell 3% after J.P. Morgan Cazenove downgraded the
water company to underweight from neutral. It cited concerns about
rising regulatory risks, and a decreasing likelihood of mergers and
acquisitions activity.
Away from the main index, retailer Debenhams PLC fell 1% after
HSBC cut it to neutral from overweight, citing a poor Christmas
sales season. HSBC lifted fellow retailer Next PLC to overweight
from neutral, but retailers across the U.K. remained under
pressure. Next shares fell 1.1%, while Wm Morrison Supermarkets PLC
lost 1.5%.
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