FTSE 100 live: Barclays and Lloyds Bank help London index kick off new week in the black

London’s FTSE 100 kicked off the week with a positive start, led by Lloyds Bank and Barclays which both rose ahead of UK banks’ earnings season ramping up.

The capital’s premier index nudged 0.11 per cent higher to 8,013.20 points, while the domestically-focused mid-cap FTSE 250 index, which is more aligned with the health of the UK economy, inched 0.02 per cent lower to 20,085.23 points.

Britain’s biggest high street lenders led London shares higher during opening trading as investors signalling investors are upbeat about the final week of banks earnings season.

Lloyds Bank, up nearly one per cent today, pushed to near the top of the index despite analysts warning the firm’s profits could be trimmed by it setting aside hundreds of millions to deal with an expected jump in defaults caused by the cost of living crunch.

Barclays, which last week reported profits slimmed eight per cent forcing its shares to the bottom of the FTSE 100 on the day, advanced 1.39 per cent.

HSBC will also update shareholders this week.

Still partly taxpayer owned NatWest was trading near the bottom of the index, shedding nearly one per cent.

London’s FTSE 100 has raced out of the blocks in 2023, routinely setting new record highs and topping the 8,000 point mark for the first time ever.

FTSE 100 is up sharply over last week

Analysts said some of the froth of the new year rally on stock markets could recede due to investors finally waking up to the fact central banks are unlikely to cut interest rates this year, particularly in the US.

‘US equity markets have for now been able to shrug off this sharp rise in yields that we’ve seen since the beginning of the month. Back then markets were taking the rather naïve view that central banks would start cutting rates before the end of this year in the face of sharply falling inflation,” Michael Hewson, chief market analyst at CMC Markets UK, said.

“Now that the bond market is now starting to price what Fed policymakers have been saying more closely, there is this feeling that equity markets are not, and are pricing in way too much optimism,” he added.

The pound was broadly flat against the US dollar, while yields on UK gilts, which move inversely to prices, were slightly lower.

Oil prices jumped around one per cent.