Shares rebound as Greek fears ease

LONDON'S top share index stemmed its losses yesterday as worries over the Greek debt crisis were eased by better news from the US and healthy corporate results.

The FTSE 100 index closed up 31.23 points, or 0.6 per cent, at 5,617.84, but stocks remains down 1.9 per cent on the week as jitters surrounding the eurozone's debt problems continue to spook investors.

The Dow Jones industrial average gained 1 per cent in early trading, building on rises seen on Wednesday after assurances on interest rates from the US Federal Reserve.

Meanwhile, European officials said they were confident of agreeing a bailout for Greece in the days ahead, easing some of the pressure on markets after the Standard & Poor's downgrade for Spain late on Wednesday.

In London, positive corporate news also put shares on the front foot after a turbulent week, while the pound bounced back to near $1.53 following heavy falls against the dollar on Wednesday. Sterling stood at 1.15 against the euro.

BSkyB cheered almost 5 per cent, or 29p, to 625p as its results exceeded market expectations. The broadcaster added 62,000 net customers in the three months to end-March, taking its customer base to 9.77 million.

Consumer goods giant Unilever also posted forecast-beating first-quarter sales figures, helping shares in the maker of Dove soap and Lipton Ice tea up 64p to 1,980p.

The Edinburgh-based insurer Standard Life, meanwhile, rose strongly with a 8.5p gain to 202p after favourable broker comment. Panmure Gordon raised its recommendation to "buy" after a much better-than- expected performance in the first three months of 2010.

InterContinental Hotels was also a strong gainer after analysts at Lazard started coverage with a "buy", helping shares gain 65p and close at 1,136p.

In other sectors, drinks giant Diageo – which distills Bell's and Johnnie Walker whiskies – added 28p to 1,132p after French rival Pernod Ricard upped its sales guidance for the year.

The leading top-flight faller was oil giant BP, which shed more than 6 per cent, or 40.8p, to 584.2p after the company said the impact of last week's oil spill in the Gulf of Mexico was far worse than first estimated.

Whitbread was also down, despite a 60 per cent surge in full-year earnings at its Costa coffee chain offsetting "the most challenging hotel and restaurant trading conditions for a generation".

The group, which owns Premier Inn hotels and restaurants including Brewers Fayre, posted underlying pre-tax profits of 239.1 million for the year to 4 March, up 6.6 per cent year on year. Shares fell 38p to 1,545p.

HMV Group was also on the back foot in the FTSE 250, sliding more than 8 per cent, or 6.8p, to 72.3p after investors gave the latest trading update from the owner of HMV and Waterstone's the thumbs down. Like-for-like sales in the core UK and Irish HMV business were down 13.2 per cent in the 16 weeks to 24 April as the firm blamed January's snow, a depressed games market and fewer promotions.

Dalgety Bay-based Havelock Europa closed down 1.25p at 16.75p after the shop and school fitter swung to a full-year loss and axed its final dividend.