Markets: Markets respond to positive rhetoric

BRITISH and mainland European stocks climbed as eurozone leaders amplified the rhetoric yesterday on preserving the single currency.

Sentiment was boosted as German Chancellor Angela Merkel and Francois Hollande, the French President, pledged to do all in their power to protect the euro.

This echoed the public commitment made by European Central Bank president Mario Draghi a day earlier to do “whatever it takes” to safeguard the currency, which had sent financial markets up strongly.

The FTSE index closed up 1 per cent or 54.1 points at 5,627.2, while many of Europe’s top stocks climbed to one-week highs.

On yesterday’s gains, one analyst said: “Everybody was a little bit frustrated about negative macro news flow, so when there seems to be a glimmer of hope, certainly there is some [market]willingness to think there is a solution down the road because policymakers are moving more quickly.”

Barclays headed the Footsie leader board with strong interim profits of £4 billion providing some respite from boardroom upheaval and regulatory woes.

Barclays’ shares jumped 9 per cent, closing up 13.4p at 167p. The bank’s peers followed it, with Lloyds closing up 4 per cent, or 1.1p, at 30.2p, Royal Bank of Scotland ahead 6.6p at 214.5p, and HSBC 5.4p higher at 531.1p.

NEW YORK: Wall Street surged last night, driving the S&P 500 to its highest since May as hopes increased that the Federal Reserve and the European Central Bank may provide further stimulus.

The Dow Jones industrial average shot up 187.95 points, or 1.46 per cent, to end the day at 13,075.88 while the broader Standard & Poor’s 500 Index gained 25.96 points, or 1.91 per cent, to finish at 1,385.98. The Nasdaq Composite Index climbed 64.84 points, or 2.24 per cent, to close at 2,958.09.