Short-lived rebound on FTSE

Short-lived rebound on FTSE

A rebound for London shares on hopes that Greece’s pro-euro parties are seeing a pick-up in support prior to next month’s elections proved short-lived today.

The FTSE 100 Index rallied by as much 60 points early on but with no impetus from Wall Street, where traders have been enjoying a public holiday, the top flight was later unchanged at 5350.8.

The initial rally gave investors a break from last week’s volatility as reports suggested more Greeks want their country to keep the euro and as support for conservative parties gathers pace.

The banking sector lost hold of an initial boost with Barclays reversing a 2% gain to slip 0.8p to 180.85p but state-backed lender Lloyds Banking Group and Royal Bank of Scotland were up by 0.3p at 26.1p and 0.1p at 21p respectively.

The mining sector remained higher following reports that the Chinese government has taken further steps to boost growth in the country amid fears the economy is coming off the boil.

Risers included Antofagasta, ahead 22.5p at 1039.5p, Kazakhmys up 11p at 691p and Rio Tinto, which climbed 58p to 2853p.

The rebound of riskier assets left safe-haven stocks from the utility sector out in the cold, with National Grid down 6.75p at 677.75p and SSE off 12.5p at 1346.5p. Severn Trent, which is due to post results on Wednesday, slipped 21p to 1680p.

In the FTSE 250 Index, engineering software and IT services firm Aveva made good progress after posting a 14% rise in full-year profits to £62.3m.

It expects the recent good growth in the oil and gas industry to continue to boost the firm alongside its recent expansion in mining, fuelling shares by 11% or 167.5p to 1648.5p.

Other risers in the second tier included industrial services group Cape, which recovered some of the ground lost after a profits warning on Friday. The group strung shareholders last week by warning of a £14m hit from costs associated with an LNG project in Algeria.

Elsewhere, coal mine operator Hargreaves Services saw a 31% plunge in its shares after it warned of a lengthy production gap due to unprecedented geological conditions.

The group said work on preparing a new panel for use at Maltby Colliery in Rotherham later this year has been suspended due to the significant ingress of water, oil, gas and other hydrocarbons.

Shares were down 317.75p at 741.25p after Hargreaves said the problem would cause a production gap of 12 to 16 weeks, potentially hitting profits by £16m in the year to May 2013.

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