French credit good news boosts FTSE

Banks helped pull the London market higher yesterday after eurozone debt fears were eased when France escaped a credit rating downgrade.

The FTSE 100 Index closed 84.44 points or 1.5 per cent higher at 5,696.7, with Barclays up 6 per cent or 10.2p at 188.3p, Royal Bank of Scotland ahead 1.1p at 21.1p and Lloyds 1.1p higher at 27.3p.

Sentiment was also helped after Greece successfully raised €1.6 billion (£1.3bn) in the sale of 26-week treasury bills at a lower interest rate than a similar auction last month.

Ironically, weakening import data from China also served to boost the market. Mining stocks soared amid mounting speculation the Chinese central bank would move to stimulate economic activity. Kazakhmys was the biggest riser, ahead 58p, or 6 per cent, at 1,037p, while Fresnillo was up 94p at 1,732p.

The retail sector also had a strong day after the British Retail Consortium reported better-than-expected sales in December, following a “dazzling” week before Christmas.

Marks & Spencer’s shares were up 9.2p at 317.7p after the group reported a 0.5 per cent increase in like-for-like sales in the 13 weeks to 31 December. And department stores group Debenhams was ahead 9 per cent to 62p in the FTSE 250 Index after it said that a record pre-Christmas week had pushed sales ahead of expectations.

But shares in Craneware, the Edinburgh-based hospital billing software company, fell after it warned fewer medical centres were re-subscribing for its software, down 170.5p to 352p.

Video games retailer Game fell even harder, down 44 per cent or 3p at 3.8p, after warning it would breach a banking agreement after a dismal Christmas.

A profits warning from regional airline Flybe sent its shares 20 per cent lower at 55p.

NEW YORK: Wall Street climbed to a five-month high last night, led by materials stocks after an upbeat forecast by aluminum company Alcoa.

The Dow Jones industrial average was up 68.65 points, or 0.55 per cent, to close at 12,461.34 while the broader Standard & Poor’s 500 Index was up 11.26 points, or 0.88 per cent, at 1,291.96. The Nasdaq Composite Index closed up 25.45 points, or 0.95 per cent, at 2,702.01.