FTSE gains almost 5%

London’s FTSE 100 Index soared to gains of almost 5% today as investors returned to beleaguered financial stocks.

London’s FTSE 100 Index soared to gains of almost 5% today as investors returned to beleaguered financial stocks.

A host of major players enjoyed double-digit gains, helped by positive broker comment and a memo from the head of US banking giant Citigroup to staff saying the firm made a profit in the first two months of the year.

With Wall Street’s Dow Jones Industrial Average also nearly 5% to the good in early trading, the FTSE pulled away from the fresh six-year lows plumbed last week to close 172.8 points ahead at 3715.2.

Among the banks, Lloyds Banking Group was the best performer, adding 16% or 7.1p to 50.8p. It was closely followed by HSBC, up 50p to 399p, and Barclays, which advanced 6.1p to 67.5p as brokers at Credit Suisse upgraded the bank.

Credit Suisse said it “saw value emerging” in many UK banks. It added that Barclays looked undervalued if it managed to enter the Government’s insurance scheme for toxic assets on favourable terms.

Meanwhile hedge fund giant Man Group was another beneficiary of an upgrade as the stock added 20.3p to 175.8p, or 13%. Interdealer broker Icap cheered 44.25p to 258.5p, a gain of more than 20%.

Insurers were also beneficiaries after punishing sell-offs in recent days. Legal & General added 3.7p to 26.7p, and Prudential – the top flight’s leading riser – added 43.5p to 250.5p. Standard Life advanced 26.1p to 157.9p, while Norwich Union owner Aviva continued its recovery after spectacular losses last week, rising 20.3p to 197.3p.

Outside the financial sector, security firm G4S registered strong gains after it posted a 23% rise in full-year profits and said it expected further strong trading this year. It increased its dividend by 29%, helping to lift shares almost 7% or 11.3p to 187.8p.

Miners were also stronger with Antofagasta ahead 28.5p to 530.5p after healthy results and a better than expected dividend. Kazakhmys was 38p better at 301p with just three FTSE stocks in the red overall.

But consumer loans firm Cattles dived another 0.25p to 2p after it warned of a significant loss for 2008 and said it expected to breach banking covenants. The latest bad news follows a review of accounting practices at the Welcome Finance owner.

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