A strong session for banking stocks after some upbeat broker comment ensured the FTSE 100 Index regained its position above the 6000 mark.
The financial sector’s ongoing sovereign debt fears were also soothed by a pledge from Japan to support Europe’s bailout efforts, while Portugal’s finance minister said he does not expect his country will need emergency support.
The developments helped the FTSE 100 Index rise 64.7 points to 6020.8 while France’s benchmark CAC 40 index climbed by more than 1%.
The Dow Jones Industrial Average was also cheered by figures after Monday’s close from aluminium giant Alcoa, which posted strong fourth quarter profits due to stronger demand and prices.
Elsewhere, better-than-expected trading results from high street giant Marks & Spencer failed to lift its shares as a cautious outlook spooked investors and prompted shares to fall 11.9p to 372.1p. The drop of 3% came despite UK like-for-like sales growth in the 13 weeks to January 1 of 2.8%.
In the banking sector the mood was lifted by a note from Citigroup upgrading HSBC and the view of Societe Generale that profitability should be significantly more sustainable than the market currently expects.
HSBC saw shares advance 15.8p to 688.2p, while Barclays surged more than 4% or 11.55p to 288.25p and part-nationalised Lloyds added 1.1p to 66.25p.
Flavour-of-the-month ARM Holdings continued to enjoy a strong run as the computer chip designer surged towards the top of the risers board, up nearly 6% or 27.4p at 492.3p. The Cambridge-based firm is still benefiting from last week’s announcement from computing giant Microsoft, which intends to develop Windows-based platforms running on ARM-designed chips.
Wolseley jumped 7% after the building supplies firm got a boost from Citigroup and Deutsche Bank as they upgraded their target prices for the blue-chip stock. Shares responded with a rise of 140p to 2197p.
Capital Shopping Centres was near the bottom of the top tier, down 11.4p to 381.1p, after America’s Simon Property Group dropped its £3 billion takeover pursuit of the shopping mall owner.
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