(Reuters) - UK shares hit their highest in nearly three-months on Thursday on bets of a rebound in post-coronavirus economic activity, but later reversed course to close lower with major banks and resource stocks weighing on the blue-chip index.
Heavyweight HSBC (HSBA.L) and its banking peers were among the biggest drags on the FTSE 100 after the Bank of England said it will gather more information from lenders on their likely lending losses.
Asset manager Intermediate Capital Group (ICP.L) dropped 7.6% after its investment arm posted an annual loss as market fallout from the virus pushed valuations lower.
“The rally could have another leg higher, especially as the dollar looks to be on a downward trajectory, which may be a sign that investors are growing more optimistic and increasing their risk exposure,” said Hussein Sayed, Chief Market Strategist at FXTM.
“However, for those who have made significant gains over the past couple of months, protecting their portfolios from the downside may be a good idea.”
Global stocks have rallied with a pick up in economic data, and as governments and central banks offer huge amounts of monetary and fiscal support to their economies.
The European Central Bank approved a bigger-than-expected expansion of its pandemic stimulus package on Thursday.
Luxury carmaker Aston Martin (AML.L) fell more than 3% after saying it would shed up to 500 jobs and car dealership firm Lookers (LOOK.L) recouped early losses to soar nearly 16% after setting out plans to close 12 sites and lay off 1,500 employees.
Reporting by Sagarika Jaisinghani and Shashank Nayar in Bengaluru; Editing by Shailesh Kuber and Arun Koyyur; Editing by Kirsten Donovan