Renewed hopes that Greece will close a deal with private bondholders to ease its debt burden powered world markets to sizeable gains today.
The FTSE 100 Index closed 1%, or 68.3 points higher at 5,859.7 in a clear sign that investors expect a positive outcome in Greece’s debt swap with private investors – the result of which is expected tomorrow.
The gains in European markets were even stronger, with the Dax and Cac 40 in Germany and France both up by more than 2%.
In London, banks had a volatile day despite the latest boost to the survival chances of the beleaguered euro.
Barclays was 1.7p higher at 240.7p but Lloyds Banking Group fell 0.1p to 34.3p.
Miners were boosted by an improvement in risk appetite, with Vedanta Resources up 49p at £13.93 and Antofagasta 38p higher at £12.68.
The Footsie’s biggest risers were Hammerson up 21.3p at 411.3p, Petrofac ahead 84p at £16.75, Burberry up 71p at £15.08 and IMI ahead 38p at 989.5p.
Supermarket chain Morrisons’ full-year figures were slightly ahead of expectations, leading to a rise in its share price of 4.9p to 289.7p.
There was also a further rally for insurer Aviva as chief executive Andrew Moss increased his operating targets in the wake of a 6% rise in 2011 profits. Shares, up 5.6p to 356.8p, have rallied by around 30% since December.
Aviva’s update was well-received by followers of rival Prudential, which climbed 7.5p to £7.10 ahead of its update on Tuesday.
The Footsie’s biggest fallers were Man Group down 4.3p at 141.8p, Fresnillo off 15p at £18.24, Schroders down 11p at £15.50, International Power off 1.2p at 358.2p.
Outside the top flight, Cineworld was 4% higher, up 7.25p to 207.25p, after it reported a 10% rise in annual pre-tax profits to £33.4million.
Alan Cockburn, of investment manager and financial planning specialist Brewin Dolphin in Aberdeen, highlighted Hunting up 6.7% to £8.55 and EnQuest gaining 4.1% to 125.8p.
A.G. Barr eased 1.8% to 1129.5p, FirstGroup slipped 0.9% to 284.3p and SSE edged 0.2% lower to £12.90.