Greek chorus of hope boosts Footsie

The London market surged more than 1 per cent yesterday as investors regained their appetite for risk amid hopes that Greece will avoid a debt default by agreeing to tough austerity measures.

There was optimism that the Greek government would win a confidence vote, which would pave the way for the country to implement unpopular cost-cutting measures it needs to stay afloat.

David Jones, chief market strategist at IG Index, said traders were confident the motion would be passed as "the Greek parliament failing to find confidence in the government would be akin to turkeys voting to make Christmas a weekly event".

London's top flight had slumped to near three month lows on Monday as a result of the recent gloom surrounding the eurozone debt crisis, but reports that the opposition parties may support the government finally gave a reason for buyers to return.

The pound was down against the euro, at €1.13, after the single currency was strengthened by hopes that Greece could avoid a default. Sterling was flat against the dollar, at $1.62.

The more optimistic sentiment on the markets boosted commodity prices, with Brent crude oil up at $111.7 a barrel, benefiting miners and energy companies.

Commodities trader Glencore's share price rebounded after a recent rocky spell. It was up 16p to 495.2p while miners on the rise included Antofagasta, which added 62p to 1,272p.

BP gained 16.1p to 445.7p after reaching an out-of-court settlement with one of the companies it contracted for work on the Deepwater Horizon rig which exploded last year.

The deal will see Weatherford - one of the world's largest oil services providers - pay BP $75 million (46.3m) in return for protection from claims resulting from the accident.

In corporate results, strong trading at Whitbread's flagship businesses Premier Inn and Costa helped propel the leisure group to the top of the blue-chip risers board.

While the first-quarter improvement was offset by tougher conditions for its pub restaurants, Whitbread shares jumped 7 per cent, or 102p, to 1,587p.

The biggest blue-chip decline came from SABMiller after it declared its interest in buying Australian brewer Foster's. The approach, worth 6.2 billion, was rejected but shares still fell 4 per cent or 79p to 2,103p on fears that SAB will increase its offer or become involved in a bidding war.

In the FTSE 250 Index, banking software group Misys jumped 9 per cent after it said it had received a takeover approach. Misys gave no indication over who the bidder might be, but in recent weeks market talk has mentioned US firms Sungard and FIS Global as possible bidders. Shares jumped 34.4p to a new 10-year high of 418.9p.

Among the Scottish companies, CCTV systems-maker IndigoVision continued its decline after a shock profits warning knocked a third of its share price on Friday. Shares were down a further 8 per cent or 25p yesterday, to 287.5p.But Weir Group was buoyed by its presentation day for analysts on its upstream oil and gas equipment businesses, and gained 66p to 2,057p.