London’s blue chips recovered more ground as markets across Europe ended a volatile week on a rising note.
The FTSE 100 Index climbed 157.2 points to 5320, clawing back some of the hefty losses seen in the last fortnight, after figures showed US retail sales rose by a better-than-expected 0.5% in July.
The pound also rose strongly against the euro at 1.143, though sterling was steadier against the dollar at 1.628.
Today’s data offered some comfort over the state of the US economy and provided a bright finish to a week of extreme volatility on Wall Street.
The Dow Jones Industrial Average has moved by more than 400 points in the past four days of trading – the first time it has done so in the index’s 115-year history – and moved higher again today with a rise of 1.7% or 180 points.
France’s CAC-40 was also 4% higher after a week dominated by rumours regarding the health of the country’s banking sector, while indices in Italy, Spain and Germany also showed healthy gains.
Some of those fears were quelled when France’s biggest bank, Societe Generale, asked the regulator to investigate the rumours surrounding it, claiming they are unfounded. A short-selling ban has also been introduced on financial shares for the next fifteen days.
The relief rally in London was reflected in advances for banking and mining stocks, with Barclays ahead 9.4p at 187.2p, Royal Bank of Scotland 1.22p higher at 26.5p, Lloyds Banking up 1.6p at 33.8p and among the miners Kazakhmys 60.5p stronger at 1015p, Rio Tinto up 157p at 3688.5p and Glencore up 24p at 406.7p.
In a quiet session for corporate news, shares in Trinity Mirror jumped 18% or 6.8p to 45p after the newspaper publisher said circulation revenues had been boosted by improved Sunday sales following the demise of the News of the World. Pre-tax profits dropped 17% to £41.9m in the 26 weeks to July 3.
Other risers outside the top flight included Spirit Pub as the managed pub operator, which demerged from Punch Taverns earlier this month, showed signs of recovery after a weak start to trading. The stock jumped 17% or 6.7p to 46.7p.
Sports Direct International shares were 5.5p higher at 211.4p after the Office of Fair Trading said it had dropped its two-year investigation into allegations of anti-competitive practices in the sports goods sector.
JJB Sports, which was also involved in the inquiry, added 3.3p to 22.5p – an improvement of nearly 17%.
Meanwhile, sentiment towards online grocer Ocado remained weak after house broker Goldman Sachs sharply downgraded its forecasts for the company. Ocado’s shares were 180p at its float last year but were down another 7.1p to 125.4p today.
The biggest Footsie risers were Inmarsat up 39.1p at 441p, Weir Group ahead 117p at 1907p, Kazakhmys up 60.5p at 1015p and Essar Energy 17.8p better at 300.7p.
The only Footsie faller was Randgold Resources down 15p at 6170p.