FTSE rises amid eurozone optimism
London's FTSE 100 Index has surged 1.4% higher as hopes of a resolution to the eurozone crisis offset another day of scandal for Britain's banking sector.Barclays shares came under further pressure after Thursday's 15.5% tumble following revelations of its rate-rigging scandal.
But Lloyds Banking group and Royal Bank of Scotland made gains on Friday as the wider index leapt 78.1 points to 5571.2 after politicians agreed at a summit in Brussels that struggling banks could have direct access to the EU's bailout fund without adding to Government debt.
The Dow Jones Industrial Average also rose 1.8% in early trading, despite figures showing that US consumer spending failed to rise between April and May, while markets in France and Germany were up more than 4%.
The breakthrough saw Italy and Spain benefit from a sharp drop in their implied borrowing costs on bond markets, while the euro was boosted on currency markets.
The pound fell against a strengthened euro, to 1.24 euros, but rose to 1.57 US dollars.
UK banks were boosted by the prospect of more help for the sector, which suffered severe losses on Thursday amid fears that a costly rate-rigging scandal uncovered at Barclays was set to spread to other lenders.
And a fresh scandal emerged when the Financial Services Authority revealed mis-selling in the banking industry involving complex interest hedging products.
But Royal Bank of Scotland rose 4%, or 8.9p at 215.3p, while Lloyds rose 1.2p to 31.1p, or 4%, and HSBC was up 2.9p at 561.1p. Barclays fell another 2% or 2.8p to 162.9p after more than £3 billion was wiped off its market value on Thursday amid fears that its £290 million rate rigging fine might be dwarfed by multi-billion pound legal claims.
Heavily weighted mining stocks were the main drivers of the Footsie gains as the developments in the eurozone boosted hopes for the global economy. Miner Evraz was the biggest riser, up 19.7p at 260.7p.
The pound fell against a strengthened euro, to 1.24 euros, but rose to 1.57 US dollars.
UK banks were boosted by the prospect of more help for the sector, which suffered severe losses on Thursday amid fears that a costly rate-rigging scandal uncovered at Barclays was set to spread to other lenders.
And a fresh scandal emerged when the Financial Services Authority revealed mis-selling in the banking industry involving complex interest hedging products.
But Royal Bank of Scotland rose 4%, or 8.9p at 215.3p, while Lloyds rose 1.2p to 31.1p, or 4%, and HSBC was up 2.9p at 561.1p. Barclays fell another 2% or 2.8p to 162.9p after more than £3 billion was wiped off its market value on Thursday amid fears that its £290 million rate rigging fine might be dwarfed by multi-billion pound legal claims.
Heavily weighted mining stocks were the main drivers of the Footsie gains as the developments in the eurozone boosted hopes for the global economy. Miner Evraz was the biggest riser, up 19.7p at 260.7p.
© 2013 Press Association