FTSE steadies after rollercoaster day

The FTSE 100 index see-sawed through a 175-point range, dipping below the psychologically-important 5,000-mark at one stage in early trading.

Reports of a deal to cut Greece’s debt in half and recapitalise Europe’s banks – later downplayed by eurozone officials – helped the Footsie to end the day up 22.56 points at 5,089.37.

Yusuf Heusen, a sales trader at IG Index, said: “It’s been another volatile session, but ultimately a positive one for the FTSE 100. Wide-ranging markets are very much the rule and not the exception at the moment.

“At the open, the FTSE was down 100 points but staged a sharp recovery off these lows, as markets appeared to be willing once again to give politicians the benefit of the doubt when it comes to sorting out the immediate problem of Greek debt.”

There was similar volatility across other markets, with the Dax nearly 3 per cent stronger in Germany and France’s CAC-40 up nearly 2 per cent.

On Wall Street, the Dow Jones Industrial Average was up about 1 per cent by the time London closed, buoyed by talk of a eurozone deal.

The pound was up against most currencies as it rebounded from recent falls. It was at $1.55 against the dollar and at €1.15 against the euro.

Miners were the main cause of the weakness in London, with selling sparked by ongoing global growth fears, which have been accompanied by a sharp slide in gold and silver prices.

CME Group, the world’s largest futures market, increased the minimum investment value in gold to cover itself amid market uncertainty. This triggered a further slide in the price, which has fallen by more than $300 per ounce to $1,604 in the past three weeks. Silver miner Fresnillo was down by 7 per cent, or 112p, to 1,524p, while Randgold Resources slumped 180p to 6,170p.

Banks were aided by signs of a Greek rescue plan. Barclays was the biggest riser, up 7 per cent, or 10p, to 156p. Lloyds Banking Group was ahead 1.1p at 35.2p and Royal Bank of Scotland was 0.7p higher at 23.6p.

Elsewhere, shares in Tesco were 2 per cent higher as it launched £500 million of price cuts. The stock, which rose 6.2p to 371.4p, was given a lift by rumours that billionaire investor Warren Buffett had upped his stake in the UK’s biggest supermarket chain. Rival Sainsbury’s was 4.6p higher at 270.9p.

Among the Scottish stocks, FirstGroup was on the up – 6.5p stronger at 320.3p – after analysts at Peel Hunt upped their rating on the Aberdeen-based transport firm from “sell” to “hold” ahead of Thursday’s interim results. Perth-based peer Stagecoach was up 0.8p at 241.5p.

Directors of Scottish firms also put their hands in their pockets, with non-executive board member Jeremy Beeton snapping up 1,000 shares in Perth-based utility Scottish & Southern Energy at 1,267.5p each. SSE closed down 3p at 1,281p.

Incoming chief executive Ashley Highfield spent nearly £20,000 on 377,000 shares in Johnston Press, publisher of The Scotsman, Scotland on Sunday and Edinburgh Evening News. JP dipped 0.05p at 4.83p.