Irish debt confidence a boost for FTSE

London's Footsie index staged a bounce back yesterday amid growing confidence that Ireland will resolve its debt crisis.

The arrival in Dublin of a rescue team from the International Monetary Fund (IMF) fuelled speculation that the country will soon receive tens of billions of euros in loans in an effort to provide much-needed stability to the European financial system.

The FTSE 100 Index reclaimed some of the hefty losses seen in recent sessions, closing 76.15 points or 1.3 per cent higher at 5,768.71. Stocks also bounded ahead on Wall Street, with the Dow Jones Industrial Average up 1.6 per cent by the time London closed, while indices across Europe were likewise higher.

Will Hedden, a sales trader at IG Index, said: "A broad rally on Wall Street helped the FTSE 100 to maintain the momentum it gained in the morning, with a return to positive territory for the week in sight.

"With the troubles in Ireland taking centre stage, company results have taken a backseat to the wider economic news over the last few days."

A fall in the value of the dollar made commodity stocks more attractive to investors and the greenback's weakness helped the pound strengthen, to $1.60.

There was further encouragement from the Organisation for Economic Co-operation and Development (OECD) after it said that growth in the world's most developed economies will gradually pick up pace over the coming two years although the recovery will be uneven.

The developments in the Irish debt crisis eased pressure on UK banks as Lloyds Banking Group lifted 1.4p to 67.8p and Royal Bank of Scotland cheered 0.3p to 42p.

The mining sector also benefited from hopes that China will not use higher interest rates as a way of slowing inflation, helping lift Rio Tinto by 134p to 4281.5p and Kazakhmys by 44p to 1,470p.

They were joined on the way up by British Airways, which climbed 11.5p to 272.9p after Air France-KLM raised its full-year earnings target.

The biggest rise of the session came from SABMiller, which added 105p to 2,157p after the maker of beers including Grolsch and Peroni Nastro Azzurro posted better-than-expected interim profits.

There was a similar shares boost for defence technology firm Qinetiq in the FTSE 250 Index after it reassured investors with a rise in half-year profits and as it said it remained on track to meet full-year guidance.

Shares jumped 14 per cent or 13.5p to 112.5p after Qinetiq also announced a major fall in its debt pile following ongoing restructuring measures.

The defence firm was joined on the risers board by Halfords after shares in the car accessories firm recovered from a weak start seen in the wake of its half-year results.It reported a 5 per cent drop in like-for-like sales in its UK retail division over the past six weeks, offsetting a rise in half-year profits.

Shares were initially 2 per cent lower but recovered to stand 15.1p higher at 426.6p, a rise of 4 per cent on the start of trading.

Other FTSE 250 retailers on the front foot included Debenhams, which climbed 2p to 71.4p after official figures showed a 0.5 per cent month-on-month rise in sales volumes for October.