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* Banks top gainers on FTSE 100
* A.G. Barr falls as annual profit slumps
* Royal Mail rises on dividend payment
* FTSE 100 up 0.5%, FTSE 250 adds 0.7%
(Updates to close)
By Shivani Kumaresan and Amal S
March 30 (Reuters) - Banks and mining stocks lifted British
shares on Tuesday amid investor optimism around a vaccine-led
economic recovery, while Royal Mail climbed after announcing a
one-off dividend payment.
The blue-chip FTSE 100 index ended 0.5% higher, with
bank and mining stocks including HSBC Holdings,
Barclays, Prudential Financial, Rio Tinto
, Anglo American and BHP among the
biggest gainers.
Further gains were capped by weakness in defensive plays
including consumer staples, healthcare and utilities.
"Two recent worries for the market seemed to have eased on
Tuesday with the Suez Canal finally unblocked and concern over
the Archegos family office saga beginning to die down," said
Russ Mould, director at AJ Bell investment.
"The problem for markets is that recovery brings with it
other risks – notably inflation – while clearly a renewed
pandemic-inspired downturn would also be bad news for stocks."
The FTSE 100 has rebounded more than 38% from a
coronavirus-driven crash last year, but has struggled to reach
pre-pandemic highs due to lockdown measures that have curtailed
economic activity and rising concerns around inflation.
Royal Mail added 2%, after saying it would pay a
one-off dividend for the year ending March following recent
upgrades to its financial outlook on the back of a surge in
parcel demand during the pandemic and a recent pick-up in letter
volumes.
Meanwhile, adding to the recovery hopes, Catherine
McGuinness, policy chair at the City of London Corporation, told
BBC Radio she was confident that trade would return for cafes,
pubs, restaurants and other businesses as most workers are
likely to return to their offices after the pandemic.
The domestically focused mid-cap FTSE 250 index
climbed 0.7%, led by industrials stocks.
A.G. Barr, best known for Scottish fizzy drink
Irn-Bru, fell 6.7%, after a 30.5% slump in full-year profit, as
coronavirus-led restrictions imposed last December weakened
sales in pubs and sapped demand for its products.
(Reporting by Shivani Kumaresan and Amal S in Bengaluru;
Editing by Shailesh Kuber and Bernadette Baum)
