August 10, 2002	Saturday	Jamadi-ul-Awwal 30,1423

LONDON, Aug 9: Britain’s leading shares surged late on Friday to seal their best weekly performance since September, buoyed by hopes for a cut in US interest rates and growing confidence earnings are on the road to recovery.

Banks led the surge, with Lloyds TSB up 5.1 per cent, as the absence of profit warnings in the latest reporting season outweighed worries about a tough environment and exposure to bad debts. Most insurers also turned higher.

The FTSE 100 index closed up 81.9 points, or 1.9 per cent, at the day’s peak of 4,322.4, over 130 points above its morning low and its best close since July 10.

The late surge took the FTSE just above technical resistance seen around 4,300 points, and left the index up six per cent on the week — its best weekly performance since the last week of September.

Banks added 17 points to the FTSE’s advance, as dealers said in addition to the absence of earnings shocks, the possibility of more cuts in interest rates lent support, although the mood was tempered by news of deeper accounting errors at US telecoms firm WorldCom.

Following Lloyds higher were Barclays, up four per cent, and Royal Bank of Scotland, up 1.3 per cent.

Trading volume accelerated late in the day, ending at a modest 1.9 billion shares. Only 15 of the UK’s biggest 100 stocks ended down on the day.

A turnaround on Wall Street aided the buoyant end to the week in Europe. The Dow Jones industrial average was up 20 points at the time of the London market’s close, having tumbled over 130 points in early trading as investors cashed in after three days of strong gains.

Insurer Royal & Sun Alliance fell another 4.9 per cent to 106-1/2 pence after Thursday’s bleak results, when the company slashed its dividend and said it planned to raise fresh funds to shore up its balance sheet.

But the more confident market mood was highlighted by resurgent life assurers. Aviva rallied 5.9 per cent, Prudential added 5.6 per cent and Friends Provident jumped 6.4 per cent.

Leisure and hotel chains Six Continents topped the FTSE leaderboard with a seven percent surge, boosted by a positive outlook statement from midcap hotels group Millennium & Copthorne on Thursday, indicating the industry was past its worst. M&C shares added 5.9 per cent, while Hilton Group added 3.3 per cent.

The midcap FTSE 250 index closed up 1.1 per cent at 4,722.9, while the techMARK gained one per cent.

EUROPEAN STOCKS: European stocks edged lower in early deals on Friday as dealers booked profits following strong gains earlier in the week, unimpressed by events on Wall Street where stocks had chalked up gains for the third day in a row.

Across the 12-nation euro zone, the Euro Stoxx 50 index fell 0.3 per cent to 2,689.0 points.

The German DAX 30 index fell 0.1 per cent to 3,674.4 points, the French CAC 40 index lost 0.5 per cent to 3,370.1 points.

In other European markets, stocks declined 0.4 percent in Amsterdam, 0.2 per cent in Madrid, 0.3 per cent in Zurich and were flat in Milan and Stockholm.—Reuters/AFP