It may be April Fool's Day but surely the rises in bank shares are a prank too far. The near £10bn write down at UBS for sub-prime problems, along with a £2bn loss at Deutsche Bank, were expected to send financial shares lower.
But no, it appears the market once again believes - perhaps in a case of hope over experience - that the worst is over.
Martin Slaney at GFT Global Markets said: "For banks to be trading higher this morning, in spite of the additional writedown announcements from UBS and Deutsche Bank, this is symptomatic that the bear market is reaching a bottom.
"This is a very significant move for the markets - if it is sustained. Pre-open we were expecting UBS to be down at least 5%, so a reversal in sentiment of this magnitude is certainly encouraging. It appears that the rights issue and managerial restructuring announced along side the write-downs by UBS will keep their major shareholders content for now."
Whatever the case, the UK banks are benefiting. Royal Bank of Scotland has risen 13.75p to 351p, Barclays is 18.25p better at 471.25p and Alliance & Leicester has added 19.5p to 538p. Lloyds TSB is 17p ahead at 468p.
Elsewhere pharmaceuticals group AstraZeneca climbed another 102p to £19.86 after this week's encouraging news on anti-cholesterol treatment Crestor. Evolution said: "Astra's modest rating reflects a number of near term specific threats, notably at-risk generic launches of competitor products to Nexium and Seroquel. In our view, this risk is worth taking. A 'relief rally' is in prospect over the next six months in the absence of at-risk challenges."
Helped by the banks and despite a slump in mining shares, the FTSE 100 is 46.7 points higher at 5748.8. But seven of the top ten fallers in the leading index are miners, partly on worries about falling Australian coal prices.
Among the smaller caps, Land of Leather has lost nearly 12% to 47.75p after Sleep Depot - which operates 71 concessions in its stores - reportedly went into administration. The loss of rental income for the rest of the year will amount to £1.6m, said Land.
