Markets: FTSE up as early jitters are overcome

FTSE 100 CLOSE 5391.14 +34.80

Wall Street’s return to trading after the long Memorial Day weekend helped push Britain’s blue-chip stocks higher, despite continued concerns over the health of Spain’s economy.

Investors were cheered by hopes that China may unleash more spending measures, although the European Central Bank countered speculation that it was considering more help for ailing eurozone banks.

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In London, the FTSE 100 Index dipped into negative territory during mid-morning trading but ended the day up 34.8 points at 5,391.1.

Banking shares suffered a sell-off, though, as Spain continued to cast a shadow over the market, with Royal Bank of Scotland down 0.34p at 20.62p. Concerns about Spain’s banks have grown since Bankia said it needed more than £15 billion in state aid because of the impact of bad debts. Lloyds Banking Group was off 0.14p at 25.9p.

But International Airlines Group (IAG), owner of British Airways and Spain’s Iberia airlines, rebounded after Monday’s slide, caused by fears that Bankia could sell its 12 per cent stake in the group. Its shares soared 5.6p, or 4.1 per cent, to 142.7p.

Chris Beauchamp, market analyst at IG Index, said: “An official denial by China of any additional spending or easing has been breezily ignored by investors, who have rushed to buy up shares in the battered mining sector.”

Kazakhmys was among the biggest risers, up 20p at 710.5p. Antofagasta gained 20p to 1,058p and Glencore rose 8.15p to 354.1p.

Greggs topped the list of FTSE 250 risers, jumping 8.1 per cent, or 37.9p, to 504.5p after Chancellor George Osborne backtracked on his “pasty tax” plans to charge 20 per cent VAT on hot baked snacks.

New York: Wall Street rose last night as signs Greece would stay in the eurozone were enough to spark buying in what has been a weak month for equities, while Facebook plumbed new lows on high volume.

The Dow Jones industrial average gained 127.37 points, or 1.02 per cent, to close at 12,582.20, while the broader Standard & Poor’s 500 Index gained 14.63 points, or 1.11 per cent, to 1,332.45. The Nasdaq Composite Index closed up 33.46 points, or 1.18 per cent, at 2,870.99.