Recovery day for the banks as FTSE closes up

HBOS ended the day the FTSE 100's biggest gainer - up 17% - as the blue-chip index closed 85.8 points higher at 5449.1. Rumours that Spanish bank BBVA was interested in HBOS sent its shares up 44p to 305p, well above the 275p level at which its disastrous rights issue was priced. Only 8% of investors in HBOS took the opportunity to buy new shares, the company revealed earlier this week. So today's gain will have relieved the cash call's underwriters, Morgan Stanley and Dresdner Kleinwort. The UK's other high street banks were major gainers as the browbeaten sector recovered. Barclays was the FTSE 100's third biggest percentage gainer - up 12% or 37.25p to 352p. Royal Bank of Scotland and Lloyds TSB were next on the list: RBS was up 22.25p to close at 221.25p, while Lloyds TSB rose 26.5p to 320p. Shares in insurance group... [read full story]