European Central Bank chief Mario Draghi gave markets a shot in the arm with a strong hint that he was readying for action in a month’s time.
Spanish and Italian markets were the main beneficiaries as traders anticipated an injection of cheap money in some form to help the lagging economies of southern Europe. The FTSE made more modest gains but still hit a three months high, up 42.81 points at 6,839.25.
Jasper Lawler, analyst at CMC Markets, said: “The ECB kept rates unchanged which prompted a somewhat negative reaction across equity markets more broadly, but the situation quickly reversed after Draghi commented that the bank would be more than comfortable in taking action at the June meeting.”
The London market was also bolstered by Barclays, whose shares bounced back from Tuesday’s results day sell-off after the group unveiled plans to slash costs by axeing thousands of jobs. The stock added 19.15p at 262.45p, a gain of almost 8 per cent.
Supermarket chain Morrisons made a surprise appearance on the risers’ boar after trading figures that showed like-for-like sales fell by 7.1 per cent in the 13 weeks to 4 May. The shares fell initially before staging an unexpected revival to stand 8.1p higher at 198.9p. Rival Tesco was up 9p at 295p.
And pharmaceuticals giant AstraZeneca was stronger amid speculation that US rival Pfizer is planning to return with an offer of £53 a share, valuing the business at around £67 billion. Astra shares were 82p higher at 4,713p, having eased back in recent days as the takeover trail appeared to go cold.
Outside the top flight, shares in Superdry owner SuperGroup slumped 12.5 per cent or 169p to 1,179p after it said profits would be at the lower end of expectations.