Bullish markets continue on the up

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The London market shrugged off Moody’s downgrade of French sovereign debt yesterday to consolidate Monday’s gains.

The FTSE 100 Index closed 10.4 points higher at 5,748.1 as traders exercised caution ahead of a eurozone meeting to agree Greece’s next bail-out payment, which was due to end after markets closed.

Chris Beauchamp at IG said: “The markets have been able to weather everything thrown at them, stubbornly holding on to the gains made on Monday on hopes of progress in US fiscal cliff negotiations.”

Banks were under pressure after the Financial Services Authority said they could face being broken up if they failed to comply with proposals to ring-fence retail deposits from riskier activities. Barclays was down 3.3p at 246.5p and HSBC shed 3.8p at 614.5p.

The tobacco companies were also suffering after an appeal to the World Trade Organisation against Australia’s draconian new anti-smoking laws was blocked. Imperian Tobacco was 32p lower at 2,428p and British American Tobacco dipped 15.5p at 3,200p.

Mining giant Xstrata was 3 per cent higher at 986.6p after its shareholders approved a multi-billion pound merger with commodities trader Glencore.

But most of the corporate news came from outside the top flight, with low-cost airline EasyJet on the FTSE 250 risers’ board after profits climbed to a record £317 million. Shares rose more than 6 per cent, ahead 39.5p to 692p, after the company doubled its annual dividend.

Restructuring efforts at Premier Foods were welcomed by investors, even though it will mean the loss of around 900 jobs and the closure of two bakeries. Its shares gained 3 per cent, up 2.5p to 94.8p.

NEW YORK: Wall Street ended little changed last night, halting a two-day rally after Federal Reserve chairman Ben Bernanke said the central bank lacks tools to cushion the impact of the “fiscal cliff”.

The Dow Jones industrial average was down 7.45 points, or 0.06 per cent, to end at 12,788.51 but the S&P 500 Index inched up 0.93 of a point, or 0.07 per cent, to finish at 1,387.82. The Nasdaq Composite Index was up just 0.61 of a point, or 0.02 per cent, to close at 2,916.68.