A woman walks past a logo of the Standard Chartered bank in Hong Kong on August 5, 2015. The British bank on August 5 was to release its six-month financial results . AFP PHOTO / Philippe LopezPHILIPPE LOPEZ/AFP/Getty Images©AFP

A strong performance by banking stocks was not enough to keep the FTSE 100 in positive territory on Friday as losses by energy and housebuilding companies dragged it into the red.

Royal Dutch Shell slipped 1.8 per cent to 1707.5p while BP fell 0.7 per cent to close at 359p on the back of a slide in the price of crude oil, which was down 0.4 per cent at $41.37.


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Housebuilding stocks gave back some of their gains from earlier in the week when they were given a boost in chancellor George Osborne’s budget.

Barratt Developments slipped 1.8 per cent to 574.8p, Persimmon shed 1.2 per cent to 2,088.7p, and Berkeley dropped 2.2 per cent to 3,175.5p, even after it published its interim management statement saying that profits are anticipated to be near the “upper end of expectations”.

Berkeley warned that housing supply could be hit by complex policy, reducing public sector resources and “one of the world’s highest property taxation regimes”.

Despite the warning, analysts remained bullish on the housebuilder.

“We are confident that Berkeley should be capable of maintaining a level of profit of at least the £500m that it should deliver this year in the longer term and that its record argues still for a material premium rating over the peer group,” said Robin Hardy, analyst at Shore Capital.

“This still supports a fair value of around £35 per share and, having recently dropped below £30, there is currently some value here,” he added.

London-listed banks were the day’s best-performing stocks as they bounced back from yesterday’s losses.

Standard Chartered recovered from yesterday’s 1.3 per cent fall to close up 7.6 per cent at 497.1p. RBS rose 2.3 per cent to 236.4p, Lloyds climbed 0.9 per cent to 70.0p while HSBC slipped 0.1 per cent to 451.9p.

“Standard Chartered was boosted as one of its key risk exposures is Essar Oil in India,” said Chirantan Barua, analyst at Bernstein.

“Yesterday Rosneft closed a deal to acquire 49 per cent in Essar Oil with a massive sweetener deal to pump significant oil through Essar’s refinery. What was a negative for the bank has just turned positive. Add to that a weaker dollar, strong EM trade and options expiries, and it’s been a good day for banks,” he added.

Lloyds and RBS were helped by a bullish note from Japanese financial group Nomura, which raised its target price for RBS from 275p to 280p and restated its “buy” rating for Lloyds.

Mining stocks added to yesterday’s gains, boosted by a 0.9 per cent rise in the price of iron ore.

Glencore rose 1.8 per cent to 160.8p, BHP Billiton gained 1.1 per cent to 831.3p and Anglo American rose 2.7 per cent to 546.2p, though Antofagasta slipped 4.3 per cent to 514.5p after RBC cut its rating from “sector perform” to “underperform”.

Life insurance stocks also rallied on Friday. Aviva rose 0.4 per cent to 486.4p after Barclays upgraded its price target and reaffirmed its overweight position on the stock. Prudential rose 1.2 per cent to 1,373.5p, and St James Place rose 1.2 per cent to 939.7p.

Sports Direct outperformed the benchmark index ahead of its demotion to the FTSE 250 next week, adding 5.9 per cent to 413.8p, with some traders attributing the rally to forced short covering before its move.

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