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RBS and Diageo lead FTSE 100 higher | |
(about 4 hours later) | |
The UK market posted modest gains, with Royal Bank of Scotland leading the way despite it setting aside more money to deal with US litigation. | |
Shortly before midday, the FTSE 100 index was up 13.47 points at 7,177.90. | |
RBS jumped 5.2% even though the bank said it had set aside a further $3.8bn (£3.1bn) to cover potential fines. | |
The provision is for an expected penalty over the sale of financial products linked to risky mortgages before the 2008 financial crisis. | |
"RBS shares are up a touch today, perhaps as investors decide that things might not be as bad as feared (the fines coming its way could be less than the $12bn expected), and that things can now only get better," said Neil Wilson from ETX Capital. | |
"That's a big assumption... it may to have to set more aside. It all depends on the negotiations with the Department of Justice." | |
Diageo shares rose more than 4% after the company - whose brands include Johnnie Walker Scotch and Smirnoff vodka - reported a better-than-expected 4.4% rise in sales for the half-year to 31 December. | |
The company said it had been helped by an improved performance from its US spirits business. | The company said it had been helped by an improved performance from its US spirits business. |
Whitbread shares fell 4.9% after the company reported disappointing trading at the London branches of its Premier Inn hotels business. | |
A key revenue measure for the London hotels fell by 6% in the three months to 1 December. | A key revenue measure for the London hotels fell by 6% in the three months to 1 December. |
The results overshadowed better figures from its Costa Coffee chain, where like-for-like sales grew by 4.3%. | The results overshadowed better figures from its Costa Coffee chain, where like-for-like sales grew by 4.3%. |
On the currency markets, the pound fell 0.4% against the dollar to $1.2580 and was 0.3% lower against the euro at 1.1722 euros. |