FTSE: Greece relief gives UK shares a lift

BRITAIN'S leading share index brought a two-day losing streak to an end yesterday as a request by Greece to activate an aid package eased concerns over its debt crisis and US home sales rose sharply in March.

Equities were buoyant, even as official figures showed that the UK's economy grew at a slower pace than expected in the first three months of the year.

The FTSE 100 index ended 58.32 points higher at 5,723.65, after hitting a one-month closing low on Thursday.

The Footsie lost 0.4 per cent this week, its second straight weekly loss, but is still up 5.7 per cent for the year.

Geoff Wilkinson, head of investment research at Mint Securities, said: "

The market continues to see all the good news and ignore any bad news … we are not seeing any indication investors are taking their finger off the buy button."

Wall Street also swung into positive territory, having started the day weighed by mixed earnings and economic reports. The US Commerce Department said durable goods orders fell unexpectedly last month, while Microsoft and insurance firm Travelers both reported disappointing results. But news that sales of new homes jumped 27 per cent in March – the best month since July and the biggest monthly increase in 47 years – gave shares a boost.

Stocks across Europe enjoyed a better end to a volatile week, with Greece's move to ask the European Union and International Monetary Fund for support helping the Cac 40 in France up 0.9 per cent and Germany's Dax 1.5 per cent higher.

The euro was another beneficiary of Greece's decision, but the pound was under the shadow of the weak GDP growth. Sterling fell to 1.14 but rose to $1.53.

Banks and miners were among those leading gains on the Footsie, with Royal Bank of Scotland up nearly 4 per cent or 1.9p to 55.8p, while Lloyds Banking Group added a further 2p to close at 68.5p – firming the taxpayer's paper profit on its stakes in the banks.

Both part-nationalised players were helped by broker comments noting a better outlook and the potential for improving credit quality ahead of their first quarter figures next week.

Airlines gained as flights returned to normal after the volcanic ash crisis and amid news that the European Commission is considering ways to help carriers struggling to care for stranded passengers. British Airways lifted 4 per cent, or 8.7p, to 234.2p, while EasyJet recovered early session losses to post a 8.5p gain to 496.5p.

But insurers remained in the doldrums for a second day, with Prudential down 4.5p fall to 541p. The group, which confirmed plans to list in Singapore ahead of its mammoth rights issue, was joined by Aviva, down 4.8p at 369.2p.

Elsewhere, collectibles firm Hornby surged after it revealed it would pay a dividend to shareholders this summer following a better-than-expected finish to its financial year.

Numis Securities increased its profits forecast to 5.7 million from 5m, prompting shares in the owner of the Airfix and Scalextric brands to race 16 per cent higher, up 19p to 137p.

A broker upgrade also helped insulation and roofing firm SIG to gain 7.5p and close at 137.8p.