A pledge from the president of the European Central Bank to offer unlimited funds to lower debt-ridden countries’ borrowing costs triggered a 2% surge on the London market today.
ECB boss Mario Draghi announced plans to buy bonds in a move designed to take the pressure off struggling nations such as Spain and Italy, giving them more breathing space to repair their finances.
Although the measures were widely expected, the FTSE 100 Index closed more than 2% higher, or 119.5 points at 5,777.3.
Miners and banks were among the biggest risers following the ECB’s announcement. Vedanta Resources was ahead 6%, or 51p at 928p, and Lloyds Banking Group was up 2.3p at 36.2p.
While economic developments continued to drive sentiment in the wider market, there was also some focus on the corporate field after shares in Whitbread and Morrisons both rose by around 5% at one stage.
Whitbread, which owns Premier Inn and coffee chain Costa, continued to impress investors after it reported a 4.2% jump in like-for-like sales for the 11 weeks to August 16. Shares were 111p higher at £22.10.
Supermarket group Morrisons has endured a tougher time of late, with pre-tax profits £9million lower at £440million for the six months to July 29, but the results were better than expected and shares lifted 12p higher at 292.7p.
Outside the top flight, Dixons Retail Group enjoyed another decent session as the Currys and PC World owner reported a 7% rise in UK like-for-like sales for the 12 weeks to July 21. It closed up 0.7p at 19.8p.
The biggest Footsie risers included Evraz up 15.2p at 226.7p, Polymetal up 63p at £10.20 and Barclays ahead 11.1p at 193.1p.
Among the biggest Footsie fallers were Imperial Tobacco down 62p at £23.44, Tate & Lyle off 11p at 640.5p, Burberry down 15p at £13.12 and Reed Elsevier off 1p at 604p.
Barry Shepherd, of investment manager and financial planning specialist Brewin Dolphin in Aberdeen, noted that risers included BG Group which added 3.19% to £12.60 and Weir Group gained 4.15% to£16.31.
Amongst the limited fallers were Parkmead, which lost 0.98% to 12p, and STV Group which finished 3.55% lower at 81.5p.