Gains in Barclays and UK banks buoy FTSE 100

LONDON: Barclays led gains for banks that lifted Britain's benchmark share index on Tuesday, with other sectors largely flat and the market seen vulnerable to further selling afer falling below a key level.

The blue-chip FTSE 100 was up by 0.1 percent, or 7.10 points higher, at 6,284.16 points.

Barclays rose 3.7 percent to the top of the FTSE 100's leaderboard, after unveiling new cost-cutting measures in a strategy update and higher profits.

Barclays also helped push up the share prices of rival banks such as Lloyds and Royal Bank of Scotland.

Analysts welcomed Barclays' cost reduction plans, which will result in the company slashing at least 3,700 jobs.

"For now, despite a 60 percent-plus gain in the share price over the last six months alone, the new Chief Executive looks to have done enough, with analyst opinion remaining positive in tone," said Keith Bowman, equity analyst at Hargreaves Lansdown Stockbrokers.

Many traders nevertheless remained reluctant to add to holdings of FTSE 100 shares.

The index rose around 8 percent in January to reach a 2013 peak of 6,354.46 points, before slipping back over the course of February to trade below the 6,300 points mark.

Its failure to hold above the 6,300 big figure this month has led some investors to expect a further fall and prompted them to sell shares to cash in profits made in January's rally.

"I think we could see a four to five percent correction in the next month or two," said John Smith, a fund manager at Brown Shipley Private Bank.

Smith said stocks he had sold off included Vodafone, whose 0.8 percent decline took the most points off the FTSE 100 index on Tuesday.

Vodafone's shares have risen some 10 percent since the start of 2013 but Smith said some investors had concerns over signs of weakness in its European business.

"We have been reducing our exposure in Vodafone. There are some concerns about them going forward," he said.

Mike Mason, senior dealer at Sucden Financial Private Clients, also had doubts over whether there was enough momentum to push the FTSE 100 back above the psychologically important 6,300 point level reached earlier this month.

According to Thomson Reuters Starmine data, of companies on the UK stock market to have reported fourth-quarter results so far, 46 percent have reported results below market forecasts although the majority have reported results either in-line or above forecasts.

"I'd be looking to take profits at these levels," said EGR Broking managing director Steven Mayne.