The plight of troubled British bank Northern Rock and the ongoing credit squeeze was once again expected to loom over the London stock market next week. The FTSE 100 index of leading shares finished Friday at 6,456.70 points, up 167.4 points or 2.66 percent from a week earlier.
That followed a gain of 1.58 percent the previous week - despite the unfolding of credit troubles at Northern Rock, which is Britain's fifth-biggest mortgage lender.
Investor sentiment was boosted this week by a deep cut to US interest rates."
The market is quite steady now," said Howard Wheeldon, strategist at BGC Partners. "It's been quite a week, with Northern Rock, and the US rate cuts. We've come out of it better."
Confidence in the British banking system has been shaken since last week when Northern Rock applied for emergency funds from the Bank of England owing to the global credit crunch.
Northern Rock's share price clawed back 4.91 percent to 194.30 pence on Friday. However, the lender's shares have slumped by almost 70 percent in value since last Thursday when it was forced to request a bail-out from the BoE.
Next Wednesday the Bank of England will pump 10 billion pounds (20 billion dollars, 14.3 billion euros) into longer-term money markets as it seeks to ease the ongoing global credit squeeze. The move was announced earlier this week.
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