FTSE makes gains

London’s FTSE 100 Index made more gains on hopes this week may have seen the start of a solution to the eurozone’s debt worries.

The FTSE 100 Index shrugged off a weak start on Wall Street, where off-road specialist Caterpillar disappointed with results, to close up 35.1 points at 5935 following a 46 point jump yesterday.

The euro also made gains as investors hoped that the Brussels plan to bail out Greece for a second time has at least contained Europe’s sovereign debt crisis for the timebeing.

The eurozone currency rose to 1.136 against the pound, though the dollar dipped to 1.632 against sterling as wrangling continues over the US debt ceiling.

The gains in London came despite a late wobble for the banks after analysts said they were likely to take any write-downs for their exposure to Greek debt in the upcoming half-year results.

Barclays, which is exposed to the debt-laden countries in the Iberian peninsula, dropped back 0.3p to 239.6p after jumping 8% last night.

Early gains for Royal Bank of Scotland were also trimmed to 0.8p higher at 36.9p while Lloyds Banking Group fell 0.4p to 47.1p.

Insurer Aviva, which relies heavily on the economies of Spain and Italy, was still ahead and up by 5.4p to 425.4p, a rise of 1%.

Miners joined in the rally as Rio Tinto added 45p to 4421.5p and Vedanta Resources gained 26p to 1874p.

Other heavyweight stocks on the front foot included Vodafone after the mobile phone giant offset concerns about its southern European markets to post a 1.5% rise in quarterly service revenues.

It forecast profits in line with expectations and said it has been helped by further strong trading in emerging markets such as India and Turkey, as well as continued demand for smartphones and data services.

Shares lifted more than 2% or 3.3p to 164.6p.

Elsewhere, low-cost airline easyJet delivered a major boost to shareholders by forecasting full-year pre-tax profits of between £200m and £230m, compared with the City’s consensus forecast of £179m.

The update fuelled hopes for a higher-than-expected maiden dividend next year, causing its shares to rally 18% or 55.3p to 368p in the FTSE 250 Index.

Shares in interactive whiteboards and school software supplier RM fell 15% after it admitted that its results for the year to September were more than likely to be lower than expected.

It blamed tough market conditions in the UK and United States and said it would be difficult to predict its trading performance with any certainty until after the summer, the period when it generates most of its profit. Shares slumped 27p to 117p.

The biggest Footsie risers were Fresnillo up 37p at 1681p, Royal Bank of Scotland ahead 0.8p at 36.9p, International Consolidated Airlines up 5.2p at 243p, and Reckitt Benckiser ahead 72p at 3478p.

The biggest Footsie fallers were Astrazeneca down 38p at 3054p, Essar Energy off 4p at 380p, Sage Group down 2.7p at 280.8p, and Standard Chartered off 15.5p at 1614p.