Banking rally offset weaker mining stocks to push Footsie nearer 6,100

FTSE: 6,087.38 (+2.11) Mid-250: 11,827.76 (+20.48) Small Cap: 3,295.19 (+4.58)

LONDON’S BANKING stocks continued their good run yesterday, helping keep the FTSE 100 within reach of the 6,100-point mark.

Evolution Securities added RBS to its “core buy portfolio”, saying it was a “clear beneficiary of potentially better trading conditions in retail and investment banking in the UK”, while Lloyds remained the broker’s “Top Conviction Buy” in the European banking sector.

Royal Bank of Scotland was up 3.8 per cent at 48.9p, Lloyds Banking added 3 per cent to 69.3p, helped by a “buy” rating on the stock from analysts at Nomura.

Barclays rose 0.5 per cent to 335.5p, having earlier struck its best level since August. HSBC rose 1.3 per cent to 734p.

“It does seem like the market is pausing for breath, as opposed to losing faith with the upward trend,” said Cameron Peacock, market analyst at IG Markets. “Euro zone debt worries are in check, China’s growth shows no signs of derailing and US interest rates remain low.”

But one of the London market’s other heavily-weighted sectors prevented it from making further progress. Miners provided the counterweight to momentum, tracking softer metals prices on commodities exchanges, where copper contracts hit two-week lows.

Xstrata was the sector’s biggest single faller, down 2.5 per cent at £14.38½.

Kazakhmys was 2.2 per cent weaker at £15.20.

BAE Systems, the defence engineering company, fell 4.2 per cent to 339.8p after it warned that sales could fall in 2011 as it reported a 0.8 per cent rise in earnings for 2010.

Reed Elsevier fell 2.2 per cent to 564.5p. Although the publisher of the Lancet and other scientific and academic journals said it expected a gradual recovery in 2011 and that its sales had risen in line with forecasts there was little to excite investors.

British factory orders improved more than expected in February and firms expected to put up prices at their fastest pace in 2½ years, the CBI’s monthly industrial trends survey showed.

Technical indicators on the FTSE 100 point to some fairly strong support around the 6,000 level and slightly below, Nicole Elliott, technical analyst at Mizuho Corporate Bank said.