LLOY, RBS lead banks higher

European equities markets were higher Thursday after the European Central Bank held interest rates at 1 percent and as the Bank of England held UK rates at 0.5 percent and unexpectedly expanded its spending for bond purchases in order to help out the economy.

The FTSE 100 added 0.93 percent to 4,690.53 in London, while the FTSE 250 was up 1.35 percent to 8,377.55.

Banks were mostly higher on the news from the Bank of England, led by Lloyds Banking Group (LSE: LLOY), which added 12.34 percent to turn in the best performance of the day on the 100, while Royal Bank of Scotland (LSE: RBS; NYSE: RBS PRM) was right behind with a gain of 9.75 percent.

Water utilities had a bad day on the 100 and 250.

Severn Trent (LSE: SVT) had the worst day on the 100 as it dropped 4.45 percent, while United Utilities Group (LSE: UU), which also handles electricity and gas, fell 3.22 percent and Pennon Group (LSE: PNN) was down 2.88 percent; over on the 250, Northumbrian Water Group (LSE: NWG) was 2.9 percent lower.

Miners were mixed, with Antofagasta (LSE: ANTO) worst in the sector with a delcine of 3.78 percent, while the oil sector also saw declines.

The FTSE Eurofirst 300 was up 0.44 percent to 938.56 while the Dax added 0.32 percent to 5,369.98, the CAC-40 was 0.56 percent lower to 3,477.83 and the IBEX dropped 0.67 percent to 10,776.

Airlines saw gains as Lufthansa (FWB: LHA) added 3.68 percent and Air France-KLM (Euronext: AF; NYSE: AKH) was up 3.4 percent.

Carmakers were also higher as Volkswagen (FWB: VOW) added 3.62 percent, Peugeot (Euronext: UG) was up 2.11 percent and Renault (Euronext: RNO) gained 1.55 percent.

As in the UK, banks saw gains, with Societe Generale (Euronext: GLE) up 3.26 percent while BNP Paribas (Euronext: BNP; TYO: 8665) gained 2.73 percent.

Most markets in the Asia-Pacific region were higher on the session.

The Nikkei 225 hit another 10-month closing high as it added 1.32 percent to 10,388.09 while the Topix index was up 0.84 percent to 957.51 and the Mothers market gained 0.1 percent to 458.49.

Carmakers saw gains after recent declines as investors looked for good buys and on a pending vote in the US Senate that could give more money to the popular “cash for clunkers” program that provides cash rebates to purchasers of some new cars when they trade in older, less fuel-efficient vehicles.

Camera maker Nikon Corp (TYO: 7731) was 10 percent lower on its warning that its operating loss for the full year will be ¥30 billion, more than twice as much as its original estimate, and after JPMorgan securities issued a downgrade on its shares.

Taiwan’s Taiex added 0.3 percent to 6,868.65 while the Kospi was up 0.36 percent to 1,565.04 in South Korea.

In Australia, the Sydney Ordinaries gained 1.38 percent to 4,331 and the S&P/ASX200 was 1.45 percent higher to 4,326.3, while the Hang Seng added 1.97 percent to 120,899.24 in Hong Hong.

Not all markets saw gains, however, as the Straits Times Index fell 0.2 percent to 2,601.5 while at the same time the Shanghai Composite was down 2.11 percent to 3,356.33 and the Sensex dropped 2.45 percent to 15,514.03.

New York markets were lower after the Labor Department said that while fewer people filed first-time unemployment claims last week than the week before, continuing claims were up by 69,000 after three weeks of declines.

In addition, some retailers reported slowing sales in July as worried consumers put off purchases.

At just before 1 p.m. in New York, the Dow Jones Industrial Average was down 0.32 percent to 9,251.57 while the Nasdaq Composite had fallen 0.84 percent to 1,976.36 and the S&P 500 had dropped 0.54 percent to 997.27.

Story link: LLOY, RBS lead banks higher