Financials and insurance stocks led the major gains this morning (12 March), with Royal Bank of Scotland and Lloyds Banking leading the chasing pack.
 
As at 1045 hrs, RBS was slightly ahead, up 4.8 per cent to 42.5 pence while Lloyds Banking Group was close behind, rising four per cent to 58.9 pence.

Joshua Raymond, market strategist at City Index noted that European markets had climbed 0.5 per cent in early trading on Friday, tracking gains from the US and Asian markets as investors looked ahead to this afternoon’s US retail sales figures.
 
He added, ‘The banks led the charge higher in the US last night after bipartisan Senate talks over financial regulation broke down, which is lifting a bit of uncertainty out of the banks In the near term.

‘President Obama is attempting to bring about an overhaul of the way the financial markets are regulated in the US. This could have a significant effect on the way banks seek to make money and so the breakdown in Senate talks is being seen as a positive for bank stocks.

‘Naturally therefore, the banks in Europe have been the main focus of attention so far with Royal Bank of Scotland, Lloyds and Barclays all higher by over 2 per cent and this is where much of the Index gains have originated from so far.'

More surprising, perhaps, are the fortunes of British Airways. It saw its share price take off, up 2 per cent to 234.9 pence, despite the threat of imminent strike action.
 
Investors seem to be more impressed by the company’s prospects in light of positive reports this morning from the International Air Transport Association (IATA) which halved its forecasts for airline losses, noting that it expects airlines to collectively lose $2.8 billion this year, down from $5.6 billion.
 
IATA represents 230 airlines and its members account for 93 per cent of all international passenger traffic. The US Retail Sales figures out this afternoon is where the majority of the market is looking towards today and they are likely to play a strong hand in how the markets close out the week.
 
The market is expecting a fall of 0.2 per cent due to bad weather and so anything better than this could help to cement today's gains. 

TD Waterhouse
Top ten trades
Thursday 11 March (until 12 noon)

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Buy
1. Royal Bank of Scotland, 17.1 per cent
2. Lloyds Banking Group, 15.4 per cent
3. Xstrata, 11.8 per cent
4. Kazakhmys, 10 per cent
5. Barclays, 10 per cent
6. Desire Petroleum, 8.2 per cent
7. Randgold Resources, 7.1 per cent
8. Solo Oil, 6.8 per cent
9. Morrisons Supermarket, 6.8 per cent
10. Rio Tinto, 6.8 per cent

Sell
1. Lloyds Banking Group, 45.3 per cent
2. Royal Bank of Scotland Group, 10.8 per cent
3. Barclays, 10.3 per cent
4. BT Group, 5.4 per cent
5. Johnston Press, 5.2 per cent
6. Gulf Keystone, 4.9 per cent
7. Vodafone, 4.9 per cent
8. UK Coal, 4.5 per cent
9. Xstrata, 4.5 per cent
10. Prudential, 4.2 per cent