By Barbara Kollmeyer, MarketWatch
MADRID (MarketWatch) -- London stocks closed higher on Tuesday,
driven by banks and more data confirming the U.K. economic
recovery.
The FTSE 100 index rose 0.4% to end at 6,755.45 after the index
closed slightly higher on Monday.
In the banking sector, Lloyds Banking Group PLC (LYG) rose 3%
and HSBC Holdings PLC (HSBC) gained 2.4%. Royal Bank of Scotland
Group PLC (RBS) rose 1.8% and Barclays PLC (BCS) gained 1.2%.
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 that the central bank may need
to address falling prices, or maybe try to stimulate the economy
further. 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 1%.
Broker moves triggered action for several stocks.
Shares of Severn Trent PLC fell 2.2% 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 0.5% 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 0.7%, while Wm Morrison Supermarkets PLC
lost 1.1%.
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