Rally by commodities and financials raises leading share index higher

FTSE:5,722.34 (+24.62) Mid-250:11,549.06 (+20.81) Small Cap:3,226.91 (-12.50)

BRITAIN’S LEADING share index ended higher, supported by a rally from commodity issues and banks as investors awaited news about Greece’s debt crisis, expected over the next few days.

Greece’s parliament began yesterday to debate measures to increase taxes and cut fiscal spending, approval for which is needed for the EU and International Monetary Fund to disburse the fifth tranche of Greece’s €110 billion euro bailout programme.

The FTSE 100 index closed up 24.62 points, or 0.4 per cent at 5,722.34, regaining the psychologically important 5,700 level.

Banks were higher as a sector, buoyed mostly by gains in global heavyweight HSBC, up 0.6 per cent, while emerging markets specialist Standard Chartered added 1.4 per cent ahead of a trading update today.

US blue chips were up 0.7 per cent by London’s close, rebounding from three sessions of losses as financials gained on Greek debt crisis resolution hopes.

Energy issues provided the main support for blue chips, led by BG Group, up 2.2 per cent after signing a new co-operation agreement with Bank of China.

The deal allowed for up to $1.5 billion of new funding options to support the groups growth programme.

Miners also moved higher, with sentiment helped by a bullish note after HSBC upgraded ratings for Anglo American, Antofagasta, BHP Billiton and Vedanta Resources.

Vedanta also benefited as Cairn Energy cut the price for its acquisition of a 40 percent stake in Cairn India by around 5 per cent, with the deal now to complete in two tranches.

United Utilities was the top FTSE 100 riser, adding 3.3 per cent, while Severn Trent gained 2 per cent as the sector benefited from a bid move for Northumbrian Water.

Northumbrian was the top FTSE 250 gainer, jumping 8 per cent. On the downside, drugmaker AstraZeneca shed 1.1 per cent after its experimental diabetes pill, dapagliflozin, was associated with breast and bladder cancer, as well as more cases of infections, in a late-stage clinical trial.

RBS cut its target price for AstraZeneca to 2,825p from 3,175p after reducing estimates to remove dapagliflozin.

Peer GlaxoSmithKline lost 0.7 per cent, with the drugs sectors the biggest drag on the FTSE 100 index. – (Reuters)