London: Britain’s top share index gained 0.8% by mid-day on Monday, as banks and commodities rallied following the previous session’s falls and British Airways climbed on hopes of a global alliance.
By 1154 GMT, the FTSE 100 was up 40.36 points at 5,182.81, having finished 0.4% lower on Friday, although trade was thin with Wall Street and most Asian markets shut for respective public holidays on Monday.
Anthony Grech, market analyst, at IG Index said with US and Asian market’s closed we may have already seen the biggest moves in the stock market today.
“There is always the potential for the Greece situation to add in a little bit of short-term volatility but for now it would not be a surprise to see sideways trading for the rest of the session,” he said.
Banks, which have been hit recently with uncertainty over the European Union’s Greek rescue plan, were back on the front foot.
Barclays, which is due to report full-year results on Tuesday, Lloyds Banking Group and Royal Bank of Scotland added 1.2 to 3.1%, also helped by a bullish note from Citigroup, which raised its earnings forecasts and target prices for UK domestic banks.
HSBC and Standard Chartered gained 1.5 and 0.6%, respectively.
EU leaders promised to help Greece at a summit on Thursday, but did not give details on what they could do to support the Mediterranean state in tackling a deficit and debt crisis.
Appetite for perceived riskier assets returned as worries over China’s monetary tightening policy faded, with miners Vedanta Resources, Xstrata and Kazakhmys, Antofagasta up between 1.3 and 3%.
Rio Tinto was a strong performer, up 3.1% as Merrill Lynch issued an upbeat note on the global miner, adding it to its “Europe 1 list”. Energy stocks were also higher with BG Group, BP and Royal Dutch Shell up between 0.5 and 1.2%.
British Airways was the top FTSE riser, up 3.7% after the US Department of Transportation gave its tentative approval to grant antitrust immunity to American Airlines and its four oneworld partners, including BA to form a global alliance.
Drugmaker GlaxoSmithKline was 0.6% higher after JP Morgan upgraded its recommendation on the stock to “neutral” from “underweight”.
Peers AstraZeneca and Shire also gained, up 0.1 and 0.7%, respectively.
Legal & General rose 2.3%. The life insurer is scheduled to report its fourth-quarter new business figures on Wednesday.
Selected defensive issues were among the fallers. British American Tobacco and Imperial Tobacco fell 0.4 and 0.6% respectively, and consumer goods group Unilever dropped 0.9%.
Europe’s top home improvements retailer Kingfisher fell 1.2% ahead of results due on Thursday.
BT Group was the top FTSE faller, shedding 1.5% as the firm remained under pressure after last week’s pension deficit news.
No significant economic data was released on Monday, but investors kept a wary eye on Tuesday’s UK inflation data and Wednesday’s unemployment report.