Market report: Stocks respond to better news on debt and earnings

Almost four weeks into January and traders are feeling optimistic. Talks on resolving Greece's debt crisis have resumed. Ben Bernanke, Federal Reserve chairman, says ultra-low interest rates will last another three years – a year longer than expected – and US corporate earnings continue to surprise on the upside. Little wonder stocks have responded worldwide.

The FTSE-100 briefly pushed through the 5800 level yesterday, and still closed up 72.2 points, or more than 1 per cent, at 5795.20 – a six-month high. The Cac-40 in Paris and the Dax in Frankfurt also both jumped more than 1 per cent.

The Footsie is now back at the same level as the end of July 2011, before the markets tanked on eurozone fears and US corporate jitters. There is serious talk on dealing-room floors that the market could breach 6000 soon, with some traders seeing 6100 as a realistic target – a 10 per cent rise since the start of the year.

Banks did well as the Greek government signalled growing confidence that a deal on its debt "haircut" could be reached, and Italy had to pay slightly less than in recent days to borrow money at a bond auction.

Lloyds Banking Group was the big winner, surging more than 6 per cent or 1.9p to 32.82p. Shares have risen more than 20 per cent since Antonio Horta-Osorio's return from sick leave on 9 January, and have recovered all their losses since the chief executive went on leave in the autumn. The stock is still down more than half on a year ago.

Barclays was up 5.6p at 222.85p and Royal Bank of Scotland also climbed 0.92p at 27.67p.

The miners and commodity stocks were the best performers on the FTSE-100. Strong fourth-quarter production figures suggested that any global slowdown is not as bad as feared, while low interest rates mean investors want big-cap equities that can pay well-covered dividends.

Vedanta Resources flew up to the top of the FTSE-100 leaderboard, rising 8.7 per cent or 100p to 1152p. Other notable miners to rise in the region of 4-5 per cent included Anglo-American up 82.5p at 2737p, Rio Tinto climbing 181.5p to 3893p and XStrata shooting up 50.5p to 1129.5p.

Smaller-cap stocks also enjoying a commodities lift were Petropavlovsk, soaring 75.5p to 772p at the top of FTSE-250 leaderboard, and Avocet Mining, climbing 14.25p to 226p – also on the strength of a strong last quarter.

Back on the Footsie, the cruise line operator Carnival was the biggest loser, sinking 2.2 per cent or 42p to 1901p. Fears about the wider impact on consumer sentiment of the cruise liner disaster off the Italian coast continue to weigh on the sector.

Elsewhere in the travel business, shares in easyJet really took off, rising 10 per cent or 41.7p to 445.5p, as analysts rushed to back the strategy of Carolyn McCall, the former Guardian newspaper boss who moved into the airline cockpit just over 18 months ago. She is forecasting a better-than-expected loss for the past six months, the toughest period of the year, as business travellers have splashed out on meals and other extras such as speeding boarding.

The broker Investec was impressed, upgrading its profits forecast by 9 per cent, and it rates the airline as its "key buy" in the sector with a 500p target price. "The macro backdrop remains difficult," said Investec. "However, the strength of the easyJet model is seeing it once again take share and improve margins whilst others are struggling."

At the other end of the FTSE-250 board, the IT firm Misys was the biggest loser, tumbling 6 per cent or 20p to 305.3p after sales disappointed some analysts and it warned on the outlook as customers delay decisions in the present climate. "Following these results and associated downgrades, shares are coming down," declared the broker Panmure Gordon, although it said "takeover talks will keep the 'pep' in the share price".

On AIM, shares in Vince Power's Music Festivals Group tumbled 3p to 55p after it signed up the Eighties electronic band New Order as another headline act for his four-day music festival in Benicassim, Spain, in July. Traders don't tend to let their musical tastes influence their market-making, but earlier this week Music Festivals' shares had risen a half-penny when it announced Noel Gallagher's High Flying Birds as another headline act for the same event.

Looking ahead to next week, BSkyB shares slipped 1p, to 671.5p, ahead of half-year results on Tuesday. Sky's 10.3 million customer base means it is closely watched as a consumer bellwether, and the broker Numis Securities warns in a preview: "Given macro challenges, we believe gross additions and HD [high-definition TV] upgrades will be hard to come by and churn [the rate that subscribers quit] could increase." But Numis rates the shares a buy, reckoning Sky remains strong and should see off any threat to regain its Premier League football rights.

Life & Style
Sampling wine in Turin
food + drink...and abstaining may be worse than drinking too much, says scientist
Arts & Entertainment
Kingdom Tower
architecture
Sport
Jose Mourinho restrains his assistant manager Rui Faria, Fabio Borini celebrates his winning penalty and Connor Wickham equalises for Sunderland
sportChelsea 1 Sunderland 2: Deafeat is extra bitter as former Chelsea player Fabio Borini scores late penalty to seal victory
Arts & Entertainment
Game of Thrones writer George R.R. Martin has been working on the novels since the mid-Nineties
books
VIDEO
News
Easter a dangerous time for dogs
these are the new ones. Old ones are below them... news
News
Brand said he
people
Sport
Roger Federer celebrates his victory over Novak Djokovic in the Monte Carlo Masters
sport
Voices
Actor Zac Efron
voicesTopless men? It's as bad as Page 3, says Howard Jacobson
Arts & Entertainment
The monster rears its head as it roars into the sky
film
Voices
For the Love of God (2007) The diamond-encrusted skull that divided the art world failed to sell for
its $100m asking price. It was eventually bought by a consortium
which included the artist himself.
voicesYou can shove it, Mr Webb – I'll be having fun until the day I die, says Janet Street-Porter
Extras
indybestFake it with 10 best self-tanners
Arts & Entertainment
Madonna in her music video for 'Like A Virgin'
music... and other misheard song lyrics
News
Much of the colleges’ land is off-limits to locals in Cambridge, with tight security
educationAnd has the Cambridge I knew turned its back on me?
News
peopleOrlando Bloom the pin-up hero is making a fresh start
News
Who makes you happy?
happy listSend your nominations now for the Independent on Sunday Happy List
Have you tried new the Independent Digital Edition iPad app?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

1st Line Helpdesk Engineer Apprentice

£150.00 per week: QA Apprenticeships: This company has been providing on site ...

Telesales & Sales Support Apprentice

£221.25 per week: QA Apprenticeships: This company is a well established Inter...

Client Relationship Manager - SQL, Python

£40000 - £50000 per annum: Harrington Starr: Client Relationship Manager - SQL...

**Financial Services Tax**

£35000 - £50000 per annum: Pro-Recruitment Group: Take your chance to join the...

Day In a Page

How I brokered a peace deal with Robert Mugabe: Roy Agyemang reveals the delicate diplomacy needed to get Zimbabwe’s President to sit down with the BBC

How I brokered a peace deal with Robert Mugabe

Roy Agyemang reveals the delicate diplomacy needed to get Zimbabwe’s President to sit down with the BBC
Video of British Muslims dancing to Pharrell Williams's hit Happy attacked as 'sinful'

British Muslims's Happy video attacked as 'sinful'

The four-minute clip by Honesty Policy has had more than 300,000 hits on YouTube
Church of England-raised Michael Williams describes the unexpected joys in learning about his family's Jewish faith

Michael Williams: Do as I do, not as I pray

Church of England-raised Williams describes the unexpected joys in learning about his family's Jewish faith
A History of the First World War in 100 moments: A visit to the Front Line by the Prime Minister's wife

A History of the First World War in 100 moments

A visit to the Front Line by the Prime Minister's wife
Comedian Jenny Collier: 'Sexism I experienced on stand-up circuit should be extinct'

Jenny Collier: 'Sexism on stand-up circuit should be extinct'

The comedian's appearance at a show on the eve of International Women's Day was cancelled because they had "too many women" on the bill
Cannes Film Festival: Ken Loach and Mike Leigh to fight it out for the Palme d'Or

Cannes Film Festival

Ken Loach and Mike Leigh to fight it out for the Palme d'Or
The concept album makes surprise top ten return with neolithic opus from Jethro Tull's Ian Anderson

The concept album makes surprise top ten return

Neolithic opus from Jethro Tull's Ian Anderson is unexpected success
Lichen is the surprise new ingredient on fine-dining menus, thanks to our love of Scandinavian and Indian cuisines

Lichen is surprise new ingredient on fine-dining menus

Emily Jupp discovers how it can give a unique, smoky flavour to our cooking
10 best baking books

10 best baking books

Planning a spot of baking this bank holiday weekend? From old favourites to new releases, here’s ten cookbooks for you
Jury still out on Manchester City boss Manuel Pellegrini

Jury still out on Pellegrini

Draw with Sunderland raises questions over Manchester City manager's ability to motivate and unify his players
Ben Stokes: 'Punching lockers isn't way forward'

Ben Stokes: 'Punching lockers isn't way forward'

The all-rounder has been hailed as future star after Ashes debut but incident in Caribbean added to doubts about discipline. Jon Culley meets a man looking to control his emotions
Mark Johnston: First £1 million jackpot spurs him on

Mark Johnston: First £1 million jackpot spurs him on

The most prize money ever at an All-Weather race day is up for grabs at Lingfield on Friday, and the record-breaking trainer tells Jon Freeman how times have changed
Ricky Gervais: 'People are waiting for me to fail. If you think it's awful, then just don't watch it'

Ricky Gervais: 'People are waiting for me to fail'

As the second series of his divisive sitcom 'Derek' hits screens, the comedian tells James Rampton why he'll never bow to the critics who habitually circle his work
Mad Men series 7, TV review: The suits are still sharp, but Don Draper has lost his edge

Mad Men returns for a final fling

The suits are still sharp, but Don Draper has lost his edge
Google finds a lift into space will never get off the ground as there is no material strong enough for a cable from Earth into orbit

Google finds a lift into space will never get off the ground

Technology giant’s scientists say there is no material strong enough for a cable from Earth into orbit