Global optimism keeps FTSE buoyant

A BRIGHT start on Wall Street helped the Footsie to consolidate early gains yesterday as banks and retailers led the share index higher.

The Dow Jones Industrial Average was up more than 1 per cent in early trading after United States retail sales figures came in slightly better than expected and production prices eased.

The positive data eased concerns that America's economic recovery was stalling.

Oil prices hitting a five-month high and positive signs on commodity demand from China also helped to lift the FTSE 100 index, which ended the day up 29.67 points or 0.5 per cent at 5,803.13.

Ben Critchley, sales trader at IG Index, said: "There's still a lack of momentum in equity markets, but appetite for buying does seem to be creeping back in now, aided by better than expected US retail sales data."

The pound dipped a touch against the euro to €1.13 on market talk that a solution to Greece's debt problem might be found after a number of politicians warned about the dangers of a default. Sterling rose against the dollar.

It was a poor day for commodities powerhouse Glencore, which sank to the bottom of the blue-chip index after it used its maiden results to dismiss reports of major takeover plans.

Chief executive Ivan Glasenberg said the company was not "actively considering" a bid for mining group ENRC, sending shares down more than 4 per cent or 23.4p to 500p, below its flotation price of 530p. .

Tesco perked up despite same-store sales declines, excluding VAT and fuel, of 0.1 per cent, which was slightly worse than market expectations.

The performance was an improvement on the 0.7 per cent decline in the previous quarter. Its shares rose by 0.1p to 407.3p.

The banking sector reacted well to the news that the consumer prices index measure of inflation was stable at 4.5 per cent in May, with Royal Bank of Scotland up 0.9p at 41.5p, Barclays ahead 4.2p at 264.6p and Lloyds Banking Group adding 0.9p to 48.5p.

Communications giant BT saw shares climb more than 2 per cent after its Openreach division revealed its fibre-optic lines would reach five million premises by the end of June, including in Nairn, Cumbernauld and parts of Aberdeen and Glasgow. BT was up 5.1p at 200.3p.

Among the Scottish stocks, shares in Edinburgh-based Angel Biotechnology were flat at 0.34p despite news that one of its clients had been granted permission to carry out a clinical trial following Angel's help.

Aberdeen-based oil and gas explorer Faroe Petroleum closed up 7p or 4.7 per cent at 155p, recovering some of the 13 per cent lost on Monday following disappointing news from its Lagavulin well off the west coast of Shetland.Wood Group was up 9p at 650p after the Aberdeen-based Energy services giant won a major North Sea contract extension from Taqa, the Abu Dhabi National Oil Company.

Interbulk edged 0.025p higher to 8.15p following a surge in the East Kilbride-based logistics firm's interim pre-tax profits.

Henderson Global Investors increased its stake from 10 per cent to 11 per cent in Glasgow-based broadcaster STV, which closed down 2p at 130p.