Footsie advances as financials lead rally after fears over Greek crisis ease

FTSE: 5,989.76 (+44.05) Mid-250: 12,040.28 (+106.24) Small Cap: 3,299.58 (+26.72)

FTSE:5,989.76 (+44.05) Mid-250:12,040.28 (+106.24) Small Cap:3,299.58 (+26.72)

BRITAIN’S TOP shares rose yesterday, led by banks on positive US economic data and as immediate fears over the Greek debt situation subsided.

The index posted its best weekly percentage gain in almost a year, up 5.1 per cent, in a period which saw Greece approve an austerity plan that will pave the way to a tranche of new bailout money.

The market welcomed upbeat US data which alleviated some of the recent worries over the economy, with a forecast-beating ISM manufacturing survey building on Thursday’s surprisingly strong regional business data.

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Miners, which spent much of the session in negative territory after weak data from top consumer China, came back into favour as the upbeat US data triggered an improvement in investor risk appetite.

Eurasian Natural Resources was among the best off, up 2.4 per cent while Antofagasta advanced 1.9 per cent.

Randgold Resources bucked the stronger sector trend, off 1.5 per cent and the heaviest faller in the FTSE 100, as traders cited a downbeat note from Morgan Stanley in which the broker started coverage on the precious metals miner with an “underweight” rating.

Buyers came in for risk-sensitive banks as the Greece fears receded.

Lloyds Banking, Barclays and Royal Bank of Scotland clustered towards the top of the blue-chip leaderboard, up as much as 3.7 per cent.

Interdealer broker ICAP, the subject of vague bid talk this week, was the star performer, ahead 5.1 per cent. Analysts said the stock should benefit indirectly from greater clarity on Greece as market volume is likely to pick up and drive revenue.

The UK benchmark index advanced 44.05 points, or 0.7 per cent, to 5,989.76, gaining for its sixth day in succession.

“People are relieved that the Greek situation is seemingly contained for the next couple of months. Also the most recent economic news out of the US has not been as bad as feared,” said Lex van Dam, hedge fund manager at Hampstead Capital.

On the FTSE 250 , defence firm QinetiQ climbed 7 per cent as traders pointed to talk of a possible takeover approach for the UK defence technology firm from British arms maker BAE Systems, or a US bidder. – (Reuters)