Markets: FTSE on the rise as optimism kicks in

THE Footsie hit a five-week closing high last night with optimism rising that politicians can finally agree a deal to solve its debt crisis in a crunch week for the eurozone.

European Union leaders, urged on anxiously by the United States, are seeking agreement on a convincing rescue plan that has eluded them for two years, culminating in a summit in Brussels on Thursday and Friday.

Mike Lenhoff, chief strategist at Brewin Dolphin said this Friday could be “make or break” for the eurozone, as German chancellor Angela Merkel and French president Nicolas Sarkozy formulate a rescue plan.

He said: “If Merkel gets her way with fiscal integration, market sentiment will be dramatically transformed. To say that equity markets, especially the banks, will have something to celebrate understates it.”

The FTSE 100 index rose 15.87 points, or 0.3 per cent, at 5,567.96, its highest close since 31 October. Elsewhere, the approval of tough austerity measures in debt-laden Italy spurred on investors, with both Germany’s Dax and France’s Cac 40 also moving making gains.

The battered euro received a modest confidence boost as a result, with the single currency higher against the dollar and flat against sterling at €1.16. The pound made headway against the greenback at $1.57.

In London, the banking sector was once again a key beneficiary of the improved sentiment with Lloyds up 6.3 per cent or 1.6p at 27p, Barclays ahead a penny at 191.65p, and Royal Bank of Scotland advancing 1.1p or 5.3 per cent to 22.8p.

HSBC was 7.3p higher at 518p, despite being the subject of a record £10.5 million fine from the Financial Services Authority. The bank will have to pay estimated compensation of around £30m after one of its subsidiaries sold savings products to elderly customers who were likely to die before the recommended investment period was up.

Among the Scottish stocks, Edinburgh-based life sciences firm Angel Biotechnology climbed 10.4 per cent or 0.03p to 0.27p after appointing industry stalwart Stewart White as its first commercial director.

Sigma Capital, the Edinburgh-based investment firm backed in part by Sir Tom Hunter, sold one million of its shares in Dundee-based cash machine software firm I-design, taking its stake down to 6.5 per cent from 8 per cent. Sigma’s shares were flat at 9p, while I-design held steady at 62.5p

Shares in oil and gas engineering firm Plexus – which is registered at Esher, south-east of London, but has its main operations in Aberdeen – soared 8.3 per cent or 7p to 91p after the firm signed a deal that will involve its well heads being used by Italian oil major Eni.

J Smart, the Edinburgh-based building firm was flat at 360p despite director Andrew McClure dipping into his pocket for the third time in as many weeks to buy shares. His latest purchase of 3,000 shares takes his stake up to 60,545 shares.

Non-executive director Alastair Salvesen, the scion of the eponymous logistics firm, bought 818,807 shares in Helius Energy, which is building a power plant in Moray to turn whisky industry waste into electricity. He paid 11.5p a share. Helius closed up 0.5p at 12.38p.