MArkets: Footsie rallies but volatility remains

FTSE 100 CLOSE 5473.74 +41.37

INVESTORS shrugged off Spain’s deepening problems yesterday and bought into beleaguered financial stocks to drive the market higher with a late rally.

But the uncertainty surrounding the eurozone was reflected in the fact that inter-dealer broker ICAP was among the biggest risers, on the back of a broker upgrade saying that it should benefit from volatile trading as this weekend’s Greek election “gets things moving”.

David Lowery, analyst at Faraday Research, said: “Volatile and fluctuating markets are perfect markets for ICAP. We might all know that Greece looks likely to exit the euro, but when it happens, volatility is likely to spike.”

ICAP was 2.7 per cent higher at 346.5p, helping the FTSE 100 Index close up 41.37 points at 5,473.74. Some analysts put the Footsie’s last-minute push down to growing speculation the US Federal Reserve will next week unleash further stimulus measures to boost the economy.

As traders struggled for direction, Lloyds was 2.3 per cent higher at 29.2p, while Royal Bank of Scotland gained just 0.3 per cent to 222p.

Outside the top flight, shares in Wood Group reversed early gains despite the Aberdeen-based energy services company announcing three deals for its gas turbine division. The contracts in Denmark, Nigeria and Thailand are worth a total of $20 million (£12.8m). But the shares closed 1.5p lower at 678.5p.

Driller Xcite Energy also started the day in the black after oil major BP agreed to invest £3m in its development of the Bentley field in the North Sea.

BP will also cut the amount of working capital Xcite must contribute to diluting the heavy oil from the field, but the Aberdeen firm’s shares went into reverse to end 2.5p lower at 85p. BP managed to gain 2.6p at 417.45p on news it has started drilling a further well in the Gulf of Mexico.

NEW YORK: US stocks continued to take their cues from Europe’s troubled debt market, rallying to end up as volatile Spanish bond yields came off earlier highs.

At the close, the Dow Jones Industrial Average was up 162.57 points, or 1.31 per cent, to 12,573.80. The S&P 500 Index gained 15.25 points, or 1.17 per cent, to 1,324.18. The Nasdaq Composite added 33.34 points, or 1.19 per cent, to 2,843.07