London’s leading shares index pushed higher today amid hope that Greek prime minister George Papandreou would drop his plans to hold a referendum on the eurozone rescue deal.
The FTSE 100 Index was up 61.5 points to 5545.6 after Mr Papandreou said he would try to get the rescue deal agreed by politicians rather than put it to a public vote.
The Dax in Germany and the Cac-40 in France were both up nearly 3% and the Dow Jones Industrial Average in the US was up more than 1% as the London market closed.
The pound was up against the euro at 1.16, after the single currency dropped as the European Central Bank’s new boss Mario Draghi dropped interest rates to 1.25% from 1.5% and said Europe was “heading for a mild recession”. Sterling was up against the dollar at 1.60.
Eurozone leaders last week agreed a package of measures including boosting the bailout fund to €1tn, shoring up banks’ balance sheets and writing off 50% of Greece’s loans if it implements years of tough austerity measures.
But markets slumped earlier this week following Mr Papandreou’s shock announcement of a referendum, which meant Greece could derail the rescue plan.
Today’s developments, however, mean the referendum could be called off and saw markets regain some of their losses.
Markets were also propped by good earnings from a raft of UK household names with food ingredients giant Tate & Lyle near the top of the risers’ board after it reported a 38% surge in adjusted pre-tax profits to £180min the six months to September 30.
Tate, which saw sales increase 19%, forecast a strong full-year performance. Shares were up nearly 5% or 33.5p at 680.5p.
Telecoms giant British Telecom also attracted buyers after it accompanied forecast-beating second quarter profits with an upbeat assessment of prospects for its broadband operations, where its added 166,000 new subscribers over the past three months. The shares rose 5.3p to 192.7p.
Financials were unsettled by the Greek uncertainty with the banking sector volatile. Barclays was up 3.5p at 184.6p, HSBC was 0.2p higher at 541p, but Royal Bank of Scotland fell 0.3p at 22.8p and Lloyds was 0.3p lower at 28.9p.
Insurer Aviva rallied after a weak start as it posted an 8% fall in long-term savings sales in the first nine months of the year due to the recent market turbulence. Shares were 4.4p higher at 329.5p.
On the FTSE 250, telecoms group CWC shareholders enjoyed one their best days since last year’s split from the UK part of Cable & Wireless.
Shares rose by 8% or 2.9p to 39.3p as the group, which has operations in Macau, Panama, Monaco and the Caribbean, said smartphone usage is booming while the troubled Caribbean business had stabilised.
The biggest Footsie risers were ITV up 3.7p at 65.1p, Fresnillo ahead 97p at 1880p, Tate & Lyle up 33.5p at 680.5p, and International Consolidated Airlines Group ahead 6.7p at 168.4p.
The biggest Footsie fallers were ICAP down 5.9p at 368.4p, Royal Bank of Scotland off 0.3p at 22.8p, Lloyds down 0.3p at 28.9p, and Lonmin off 10p at 1079p.