Wednesday evening business bulletin

Jul 23 2008 By nebusiness

Financial stocks roared ahead today amid takeover speculation and hopes the worst of the credit crunch may be over.

The wider market also saw a general improvement in sentiment, with the FTSE 100 Index reaching lunchtime 58.4 points stronger at 5422.5.

Halifax Bank of Scotland posted the biggest gain after rumours circulated of possible bid interest from Spain’s BBVA.

The stock rose 10% or 26p to 287p, as traders also responded to comments from US lenders Washington Mutual and Wachovia that they had no need to raise fresh capital to strengthen their balance sheets.

This meant Royal Bank of Scotland jumped 16.75p to 215.75p, Barclays rose 25.5p to 340.25p and Lloyds TSB added 17p to 337p.

Other strong gains came in the transport sector after crude oil prices fell to 126 US dollars a barrel. Cruise ship firm Carnival cheered 88p to 1896p, while British Airways added 8.25p to 254.5p.

There was also a more hopeful mood in the retail sector, with Marks & Spencer up 10.75p at 269.5p and Next 39p higher 1051p.

The Government was today urged to run a financial health campaign encouraging consumers to save rather than rely on debt.

The Association of British Insurers said with the economy in ``choppy waters", the Government needed to introduce a range of incentives to get people to improve their financial security.

These included increasing the tax-free ISA savings allowance, promoting long-term investments rather than cash deposit accounts and improving financial literacy through money guidance and generic advice.

The group said the average household had run up unsecured debts of £21,000, with people owing around £102,000 through their mortgage on top of this.

It warned that the pressures of these high debt levels, combined with rising living costs, meant consumers were likely to start using their savings to pay for day-to-day living.

Shares in price comparison website operator moneysupermarket.com shot up today after the company revealed it had received a takeover offer.

Moneysupermarket said the unsolicited bid, which has not been identified, was rejected by the firm’s chief executive and majority shareholder Simon Nixon.

The firm’s shares soared by nearly 50% in the wake of the announcement. The stock had jumped more than 10% earlier in the session.

Moneysupermarket operates under its flagship brands moneysupermarket.com and travelsupermarket.com, which allow consumers to compare prices for mortgages, loans, credit cards and package holidays.

The pound at 5pm was US$2.0022 compared to US$1.9938 at the previous close while the euro at 5pm was £0.7844  compared to £0.7929 at the previous close.