FTSE sheds concerns to rise again

Banks powered the FTSE 100 higher yesterday with gains of up to 10 per cent on hopes that the sovereign debt crisis in the eurozone was easing.

Michael Hewson, analyst at CMC Markets, said: “Equity markets have been dragged up by their bootstraps on the back of firmer banks after the morning’s French and Spanish auctions saw higher demand and lower yields.”

Britain’s top share index recovered from a shaky start to close 38.78 points or 0.7 per cent higher at 5,741.15 after improved results from Bank of America and a better-than-expected performance from Morgan Stanley in the US also aided sentiment.

Barclays was the biggest riser, up 10 per cent or 20.3p at 221.4p. Lloyds and Royal Bank of Scotland gained 9 per cent each at 32.3p and 27.1p respectively. The strong performance of banks allowed London’s leading share index to build on recent gains after breaking through the 5,700 barrier for the first time in three months on Wednesday.

The retail sector remained in focus after conglomerate Associated British Foods hailed “exceptional” trading at its Primark and sugar businesses in the 16 weeks to 7 January, sending shares up 22p to 1,159p.

However, shares in Kesa Electricals were down 6 per cent or 4.9p at 73p after its French chain Darty saw a 4.7 per cent drop in like-for-like sales and Comet suffered 15 per cent falls in the UK.

Edinburgh-based Cairn Energy announced that it had started oil production from one of its joint-venture discoveries in Rajasthan after winning government approval to turn on the tap. Shares were up 6.3p at 292.5p, as the news was seen as a sign that the firm’s relationship with its state-owned Indian partner was improving.

NEW YORK: Wall Street rose for a third straight day last night, sparked by results from Bank of America and Morgan Stanley and as the latest jobless claims dropped to a near four-year low.

The Dow Jones industrial average rose 45.03 points, or 0.36 per cent, to end at 12,623.98 while the broader Standard & Poor’s 500 Index gained 6.46 points, or 0.49 per cent, to close at 1,314.50.

The Nasdaq Composite added 18.62 points, or 0.67 per cent, to finish the day on 2,788.33.