Positive response to Brazil economy rescue deal news

FRESH signs that investors’ battered confidence could be on the mend came yesterday after the FTSE 100 Index closed up 146.1 points.

News of a rescue deal for the Brazilian economy and another strong start to trading on Wall Street lifted spirits in London.

And despite a torrid session for insurer Royal & Sun Alliance, which tumbled a huge 21%, the Footsie moved up 3.6% to end the day at 4240.5.

The Footsie was in positive territory all day, with the tone set by the IMF’s 30 billion US dollar rescue deal for Brazil setting the tone.

The momentum gathered pace late on as the Dow Jones Industrial Average moved ahead despite three straight days of gains on Wall Street. City watchers said the IMF deal had reassured traders given the fragile nature of Brazil’s economy and the economic woes in Latin America.

Shares in the high-street banks, weighed down recently by fears over rising bad debts, climbed with Royal Bank of Scotland up 97p to £15.40.

Insurer Royal & Sun Alliance plunged 30p to 112p after reporting sharply lower operating profits because of costs relating to the September 11 attacks.

In the FTSE 100, the biggest risers were Schroders NV, up 33p at 467p, GlaxoSmithKline, up 94p to £13.59, AstraZeneca, up 153p to £23.55 and Royal Bank of Scotland.

The heaviest fallers were Royal & Sun Alliance, BAT, off 11p at 706p, Lloyds TSB, down 7p at 569p and Dixons, off 1p at 153p.