FTSE extends gains

Shares in part-nationalised banks made further strides today as the London market extended gains seen after Greece’s decision to summon financial aid.

Friday’s upbeat housing market data from the US also contributed to the positive mood as the FTSE 100 Index climbed 40 points to 5763.7.

Other European markets were also 1% higher amid relief that Greece had activated an aid package which it is hoped will ease its debt crisis.

Commodity stocks benefited after a rise in metal prices as Antofagasta lifted 43.5p to 1037p, Kazakhmys rose 28p to 1458p and Xstrata cheered 19p to 1186p.

The performance of the state’s banking shares carried extra significance due to Royal Bank of Scotland’s admission at the weekend that it will need to reform its long-term bonus scheme.

RBS, which climbed 2.65p to 58.45p on improved recovery prospects, plans to revisit the details of the plan, which contained a 50p threshold for the share price element of the payout.

Meanwhile, the UK taxpayer received a further boost as Lloyds Banking Group moved 2.3p higher at 70.8p. At current levels, the British government is comfortably out of the red on its stakes in the two banks.

The biggest faller in the top flight was BSkyB, which dipped 2% – off 11.5p to 618.5p – after broker Jefferies International lowered its rating on the stock to hold. The satellite broadcaster is due to present quarterly figures this week.

Takeover talk had a major impact on shares in the FTSE 250 Index, led by power supply firm Chloride after it received a takeover approach from US industrial giant Emerson Electric.

The possibility of consolidation in the housebuilding sector, following interest in privately-owned Crest Nicholson from entrepreneur Hugh Osmond, lifted shares in a number of major players.

Barratt Developments rose 5.7p to 137.6p and Bovis Homes added 17.2p to 457.4p, while sentiment was also boosted by a positive trading statement from Redrow.

The Flintshire-based firm’s shares rose 2.4p to 153.5p after it said it would return to profit in the second half of the year.