Markets: Draghi’s move helps FTSE to rise 2%

LONDON’S top share index jumped more than 2 per cent yesterday after the European Central Bank (ECB) unveiled a bond-buying programme aimed at lowering the borrowing costs of struggling peripheral nations.

Although the measures had been widely trailed, the FTSE 100 index closed 119.5 points higher at 5,777.3, while European markets were even more bullish; Germany’s Dax and France’s Cac-40 both added nearly 3 per cent.

Michael Hewson, senior analyst at CMC Markets, said: “European equity markets liked what they heard from Mario Draghi this afternoon with respect to his plans to save the euro. There wasn’t anything there to scare the horses, even if some of the details were a bit vague.”

Banks were among the biggest beneficiaries as the chance of sovereign default from the likes of Italy and Spain was reduced. Lloyds was ahead 2.3p at 36.2p and Barclays added 11.1p at 193.1p.

Corporate news added fuel to the rally. Whitbread, which owns Premier Inn and coffee chain Costa, impressed investors with a 4.2 per cent jump in like-for-like sales for the 11 weeks to 16 August. Shares were 111p higher at 2,210p.

Supermarket group Morrisons also published better-than-expected figures and unveiled plans to reduce capital expenditure, lifting shares 12p to 292.7p.

Outside the top flight, shares in troubled miner Lonmin bounced back after it reported an agreement with unions aimed at ending its long-running labour dispute in South Africa. While two groups have still to agree, shares were 36.5p higher at 566p, a rise of 7 per cent.

NEW YORK: Wall Street closed at multi-year highs last night, with the the Standard & Poor’s 500 ending at its highest level since before the collapse of Lehman Brothers as investors hailed the new European bond-buying programme.