The London market capped its strongest weekly performance in nearly three years today after a German call for greater fiscal union in the eurozone and a better-than-expected improvement in the US unemployment rate lifted investors’ confidence.
Britain’s top 100 listed companies have added £100billion to their market value this week as the market surged 7.4% – the biggest gain since the second week of January 2009.
The FTSE 100 Index closed 1.1% or 62.9 points higher at 5,552.3 after German chancellor Angela Merkel said the EU treaty must be changed to enforce stricter financial control across the 17-nation eurozone.
The banking sector, boosted by a coordinated move earlier this week by six central banks to improve dollar liquidity, was the main beneficiary of the improved sentiment.
Barclays was top of the risers board as it lifted 13.5p to 190.7p and Lloyds Banking Group added 1.4p to 25.4p. Royal Bank of Scotland rose 1.1p to 21.6p.
Defensive utility stocks fell out of favour and filled the fallers board, with SSE down 3% or 44p at £12.74, National Grid off 3% or 20p at 607.5p and British Gas owner Centrica dropping 5.4p at 296.3p.
Outside the top flight, Argos owner Home Retail Group saw shares climb 10% amid rumours private equity groups were plotting a bid for the group and plan to bring in former Marks & Spencer boss Sir Stuart Rose as executive chairman. Shares rose 8p at 98.4p.
The biggest Footsie risers included Icap ahead 24.7p at 369p, Essar Energy up 16.4p at 245.4p and Amec ahead 61p at 943p.
The biggest Footsie fallers included Severn Trent down 55p at £14.98 and Morrison off 6.2p at 316.7p.
David Barclay, of investment manager and financial planning specialist Brewin Dolphin in Aberdeen, noted that Xcite Energy added 7.06% to close the day at 94.625p, Wood Group moved 1.69% higher at 661.25p and Aberdeen Asset Management jumped 0.94% to 203.2p.
Among the fallers, STV Group closed 1.55% lower at 87p.