FTSE 100 boosted by banking rally

FTSE 100 boosted by banking rally

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The FTSE Index rose 39.7 points to 5708.5

Banks have led a rally for the FTSE 100 Index as investors welcomed the final agreement on Europe’s £72 billion bail-out package for Ireland.

The two banks with the biggest exposure to the crisis – Royal Bank of Scotland and Lloyds Banking Group – rose 1.5p to 40.2p and 1.5p to 63.3p respectively, while Barclays added 7.1p to 266.9p and HSBC lifted 11.9p to 663p.

The deal ensured London’s top flight index climbed 39.7 points to 5708.5, although with the debt crisis threatening to spread to the Iberian peninsula the respite for investors may prove to be short-lived.

In a thin session for corporate news, British Airways rose 3.7p to 275.6p on the day shareholders voted on the airline’s merger with Iberia.

Outside the top flight, Punch Taverns lifted 3% amid speculation that it planned to call time on nearly 6,000 pubs in a move to slash its £3 billion debt mountain. Punch, which climbed 1.4p to 60.5p, will reportedly focus on its 800 managed pubs after offloading the leasehold estate to bondholders.

Meanwhile, shares in home interiors firm Walker Greenbank jumped 15% – up 6p to 45.5p – after the owner of brands including Sanderson and Harlequin reported record sales and profits for the past few weeks.

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