The London market staged a rally today as investors shrugged off recent economic concerns to pick up bargains following the recent heavy losses.
Strong corporate results from Lloyds TSB and Taylor Wimpey helped boost the banking and housing sectors, while a firm opening in the US also added to the positive sentiment.
The FTSE 100 Index closed up 154 points higher at 6360.1 – an increase of more than 2% and its highest single day gain since March 2003 – following a strong performance across the board, with just one stock ending the session in negative territory.
Positive results from Lloyds TSB, which included a dividend increase for the first time in five years after half year profits rose by 12%, helped the firm leap more than 4%, or 23.5p, to 558p.
The news lifted Royal Bank of Scotland, ahead 22.5p to 592.5p, while HBOS cheered 33p to 969.5p.
Housebuilders were also making progress after forecast-beating results from Taylor Wimpey, despite the firm’s prediction of a more subdued housing market in the second half of this year.
Persimmon was one of the beneficiaries with a gain of 60p to 1161p, while Barratt Developments added 33p to 935p. Taylor Wimpey improved by 10%, or 30.25p to 330.25p in the FTSE 250 Index after also unveiling plans for a £750 million share buyback.
Back in the top flight, GlaxoSmithKline made gains after government health advisers in the United States recommended keeping diabetes drug Avandia on the market. That was a relief for investors, as Glaxo shares gained 40p to 1255p, an improvement of nearly 4%.
Consumer products giant Unilever recouped losses from earlier in the session following a downgrade from Merrill Lynch, which foresaw cost pressures for the firm and takeover talk fading. The stock ended the day up 6p at 1550p.
However, the update saw fellow household products group Reckitt Benckiser drop 10p to 2652p – making it the only stock to close in the red.
Mining stocks added their weight to the benchmark index, buoyed by a lift in metal prices. Anglo American led the pack with a rise of more than 5%, or 144p, to 2904, Vedanta Resources lifted 88p to 1789p and BHP Billiton climbed 70p to 1473p.
Low-cost airline easyJet helped set the pace in the second tier after rival Ryanair raised its guidance for full-year profits. With analysts translating the figures, easyJet shares jumped 13%, or 58.5p to 511.5p.
Retail chain Woolworths also made progress, up 2.5p at 25.5p, after strong sales of DVDs enabled it to post like-for-like sales growth of 3.7% for the past eight weeks.
Bakery chain Greggs topped the FTSE 250 fallers with a loss of 168p, or 3%, at 4910p after it warned it was facing an increase in ingredient and overhead costs along with tougher comparatives during the second half of the year.
The leading Footsie risers were Standard Life up 18.5p to 308.5p, Compass Group ahead 18.25p to 335.5p, Persimmon up 60p to 1161p and Friends Provident ahead 9.3p to 187p.
The only Footsie faller was Reckitt Benckiser, down 10p to 2652p.