Friday morning business news bulletin

Sep 19 2008 nebusiness

Bank shares were sharply higher and London’s leading share index more than 6% up today after the City watchdog’s move to ease market nerves came into force.

The Financial Services Authority banned “short-selling“ of listed financial firm stocks - in which traders look to profit from falling share prices - to try to quell the turmoil in the market.

In early trade, Barclays shares rose by a third. HBOS, which was forced to agree a £12bn takeover from Lloyds TSB yesterday after a run on its shares, jumped 28% while its proposed new owner soared 43%.

Prime Minister Gordon Brown today stressed the Government was doing “everything in our power“ to ensure the stability of the financial system.

Mr Brown said the “decisive“ action taken by the Government was designed to ensure “investor confidence“ in the future.

Speaking in Downing Street following talks with Georgian Prime Minister Vladimir Gurgenidze, Mr Brown said: “One thing is absolutely clear - we will do everything in our power to ensure the stability of the system.

“Everything that we are doing is designed to ensure that there is investor confidence in the future.”

John Lewis Partnership today said department store sales rose 7.5% last week after an “excellent“ showing for the group’s fashion division.

The group, which opened its 27th store in Leicester this month, reported total revenues of £51.4m for the seven days to last Saturday.

Fashion sales were 20.6% higher and reflected a strong performance in back-to-school ranges, John Lewis said in its weekly trading update.

However, the Partnership’s Waitrose supermarket business struggled to make headway in the week, with sales just 0.6% higher.

HSBC has withdrawn its £3.3bn offer to buy a majority stake in Korea Exchange Bank (KEB).

The bank blamed the uncertain financial market for its decision not to purchase the share owned by Texas-based private equity firm Lone Star.

HSBC, which had announced the deal a year ago, said its plans to buy the stake were no longer in the best interests of its shareholders.

Analysts say it may use the money to buy a western bank hit by the current economic slowdown and HSBC has been linked already with Washington Mutual and the Royal Bank of Scotland.

The pound at 8am was US$1.8049 compared to US$1.8177  at the previous close.

The euro at 8am was £0.7895 compared to £0.7907 at the previous close. The FTSE-100 index at 8:45am was up 290.2 at 5170.2.

For more on these other north east business news stories see The Journal