FTSE 100 bounces back

By MoneyhighStreet Staff. Published on October 7, 2008 This post currently has no comments.

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UK blue chips advanced today, as the market attempted to shrug off credit concerns for banks and yesterday''s largest-ever one day fall.

The benchmark FTSE rose 8.17 points or 0.18 per cent.

The improvement was driven by the Federal Reserve''s announcement that it is to commence buying commercial paper.

This acted to counteract worsening sentiment over UK lenders'' prospects in the current market and the prospect of more financial institutions being brought under state control.

However, some banks were still hit hard credit concerns, with Royal Bank of Scotland falling by 36.87 per cent.

Its decline was fuelled by Standard & Poor''s announcement that it had downgraded its credit rating.

Sarah Spikes, an analyst at Arden Partners, told the Bloomberg news agency: "Credit ratings downgrades are taking a very deep toll on the markets.

"Even before that, concerns about capital were starting to seem endless."