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Solid Kingfisher, banks lift Britain's FTSE 100
May 24, 2016 / 11:51 AM / a year ago

Solid Kingfisher, banks lift Britain's FTSE 100

* FTSE 100 up 0.8 pct

* Kingfisher posts solid start to the year

* RBS leads banks higher

* Imperial Brands boosted by Barclays upgrade

* Coca-Cola HBC hit by stake sale (Adds detail and quote, updates prices)

By Kit Rees and Alistair Smout

LONDON, May 24 (Reuters) - Britain’s top share index rose on Tuesday, helped by a well-received trading statement from Kingfisher and a rally in banking stocks.

The FTSE 100 index was up 50.70 points, or 0.8 percent, at 6,187.13 points by 1135 GMT, having opened the day lower.

Kingfisher rose 2.8 percent, among top gainers after the owner of the B&Q chain reported a 3.6 percent increase in like-for-like sales in the first three months of its financial year. Traders said its UK and French divisions had performed better than expected.

“In its first half-year, it is a little early to be judging the returns from the five-year ‘One Kingfisher’ strategy but management is pleased with progress so far,” David Stoddart, analyst at Edison Investment Research, said in a note.

Royal Bank of Scotland was also a notable gainer, rising 2.7 percent after a U.S. appeals court voided a Bank of America Corp mortgage penalty.

Investors said this could mean that the U.S. Department of Justice might now ease its stance on mortgage settlements. RBS is preparing for the biggest fines in its history to settle U.S. investigations into claims it misled investors in mortgage-backed securities.

Analysts also said that the UK banking sector, which rose 1.6 percent, was boosted by readacross from a 9 percent rise in underlying profit at Nationwide Building Society, Britain’s biggest customer-owned lender, as mortgage lending increased to volumes last seen before the 2007-08 financial crisis.

“UK banks are once again in demand, with a reported rise in mortgage activity at Nationwide further enhancing the attractiveness of names like RBS,” Chris Beauchamp, senior market analyst at IG, said in a note.

Tobacco firm Imperial Brands rose 2.2 percent, benefiting from an upgrade by Barclays to “overweight” from “equal weight”.

“Imperial is executing strongly. Organic sales momentum is improving and margin/cash generation increases underpin (at least) 10 percent dividend growth,” analysts at Barclays said in a note.

“Moreover, we are increasingly confident margins will surprise to the upside and that the U.S. is performing ahead of expectations.”

The top faller was Coca-Cola HBC, down 3.8 percent after a shareholder said it was going to sell its 1.5 percent stake in the bottling company.

ADVISORY- Reuters plans to replace intra-day European and UK stock market reports with a Live Markets blog on Eikon (see cpurl://apps.cp./cms/?pageId=livemarkets for site in development). In a real-time, multimedia format from 0600 London time through the 1630 closing bell, it will include the best of our market reporting, Stocks Buzz service, Eikon graphics, Reuters pictures, eye-catching research and market zeitgeist. Breaking news and dramatic market moves will continue to be alerted to all clients and we will continue to provide a short opening story and comprehensive closing reports.

If you have any thoughts, suggestions or feedback on this, please email mike.dolan@thomsonreuters.com.

Mike Dolan, Markets Editor EMEA. (Reporting by Alistair Smout; Editing by Keith Weir and Susan Fenton)

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