Banks help to reignite the recovery

Banks and pharmaceuticals made strong gains yesterday as the London market surged back towards its near 13-year high.

HSBC and GlaxoSmithKline added the most points to the FTSE 100 index, with HSBC recovering from a 2.1 per cent fall on Friday to rebound by 2.4 per cent to 743.1p. Glaxo rose 1.9 per cent to 1,782p after Deutsche Bank upgraded it to “buy”.

Barclays rose 8.1p to 325.1p, a 2.6 per cent gain, while state-backed player Lloyds Banking Group was up 1.2p to 61.3p – just above the 61.2p break-even price set out by the UK government.

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Royal Bank of Scotland was 5.3p ahead to 332.3p despite a downgrade for the part-nationalised groups from Citi as it said shares were fairly valued after the rally over the past six weeks.

The FTSE 100 closed up 1.6 per cent, or 107.67 points, at 6,762.01. The benchmark share index hit its highest level in nearly 13 years last week but then fell 2.7 per cent in two days after the US Federal Reserve said it was considering exit strategies from its economic stimulus programme.

However, talk of more action by the European Central Bank and the Bank of Japan helped send investors flocking back to equities.

There was little in the way of corporate news after the long bank holiday weekend, though holiday firm TUI Travel was among the leaders, buoyed by acquisition activity in the sector after French rival Club Med said it had received a €541 milion (£463m) takeover bid by two of its biggest international shareholders, Chinese conglomerate Fosun and Axa Private Equity.

TUI rose almost 3 per cent or 10.7p to 369.2p after news of the approach on Monday, which Club Med said was “friendly”.

Irn-Bru maker AG Barr was up 4.5p to 574.5p after reporting a market-beating rise in revenue.

NEW YORK: Wall Street resumed its advance last night, with the Dow ending at yet another record closing high after a three-day slide.

The Dow Jones industrial 
average gained 106.29 points, or 0.69 per cent, to end the day at a record 15,409.39 while the broader Standard & Poor’s 500 Index rose 10.46 points, or 0.63 per cent, to finish at 1,660.06. The tech-heavy Nasdaq Composite Index climbed 29.74 points, or 0.86 per cent, to close at 3,488.89.