Shares soar on eurozone deal hopes

 

Shares in London soared higher on hopes that politicians could hammer out a deal to ease the eurozone debt crisis by next week.

A Sunday deadline for decisive action is now unlikely to be met, but traders gambled that a second meeting of European leaders next week will deliver radical measures to shore up the region's financial system.



The FTSE 100 index jumped by almost 2% or 103 points to 5488.6, its highest closing level since early August.



Other European stock markets also rose strongly with the CAC 40 in France and the Dax in Germany rising by 2% and 3% respectively.



European financial ministers are meeting this weekend and possibly again next week. Talk of disagreement between France and Germany over terms of any plan had spooked investors but the mood changed today after reports the two countries are close to agreement on a plan to be tabled at the meetings.



That could involve an expansion of the 440 billion euro (£383.9 billion) eurozone bailout fund to well over one trillion euro to give it more firepower to lend to struggling economies and help restore confidence in banks.



Banks were among the biggest risers in London, with taxpayer-backed Lloyds and Royal Bank of Scotland up 4% and 3% respectively and Barclays gaining 6%.



Yusuf Heusen, sales trader at IG Index, said: "The market is holding quite resolutely around the 5,400 level, when arguably there could have been a strong case for simply pulling money off the table, given the uncertainty that seems to lie ahead."



But he warned that current market rises could be the "calm before the storm" because more falls are on the cards if the markets are not satisfied that any new measures will be sufficient to deal with the crisis.



Markets have fluctuated wildly in recent months amid fears that Greece and possibly other eurozone nations could default on their debts, which could trigger another banking crash and tip the world economy back into recession.



The problem has been made worse as economic growth slowed across Europe, making it harder for countries to keep up with their debt repayments and heightening fears of a default.



This weekend's meeting, which had already been delayed by a week, was initially expected to draw up comprehensive measures to solve the problem and finally restore confidence to the markets.

PA

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

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

iJobs Job Widget
iJobs General

Tradewind Recruitment: KS2 Teacher

Negotiable: Tradewind Recruitment: My client is a two form entry primary schoo...

Tradewind Recruitment: English Teacher

Negotiable: Tradewind Recruitment: My client is an excellent, large partially ...

Tradewind Recruitment: Science Teacher

£90 - £140 per day: Tradewind Recruitment: I am currently working in partnersh...

Tradewind Recruitment: Year 3 Primary Teacher

£100 - £150 per day: Tradewind Recruitment: Year 3 Teacher Birmingham Jan 2015...

Day In a Page

Isis hostage crisis: The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power

Isis hostage crisis

The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power, says Robert Fisk
Missing salvage expert who found $50m of sunken treasure before disappearing, tracked down at last

The runaway buccaneers and the ship full of gold

Salvage expert Tommy Thompson found sunken treasure worth millions. Then he vanished... until now
Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Maverick artist Grayson Perry backs our campaign
Assisted Dying Bill: I want to be able to decide about my own death - I want to have control of my life

Assisted Dying Bill: 'I want control of my life'

This week the Assisted Dying Bill is debated in the Lords. Virginia Ironside, who has already made plans for her own self-deliverance, argues that it's time we allowed people a humane, compassionate death
Move over, kale - cabbage is the new rising star

Cabbage is king again

Sophie Morris banishes thoughts of soggy school dinners and turns over a new leaf
11 best winter skin treats

Give your moisturiser a helping hand: 11 best winter skin treats

Get an extra boost of nourishment from one of these hard-working products
Paul Scholes column: The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him

Paul Scholes column

The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him
Frank Warren column: No cigar, but pots of money: here come the Cubans

Frank Warren's Ringside

No cigar, but pots of money: here come the Cubans
Isis hostage crisis: Militant group stands strong as its numerous enemies fail to find a common plan to defeat it

Isis stands strong as its numerous enemies fail to find a common plan to defeat it

The jihadis are being squeezed militarily and economically, but there is no sign of an implosion, says Patrick Cockburn
Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action

Virtual reality: Seeing is believing

Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action
Homeless Veterans appeal: MP says Coalition ‘not doing enough’

Homeless Veterans appeal

MP says Coalition ‘not doing enough’ to help
Larry David, Steve Coogan and other comedians share stories of depression in new documentary

Comedians share stories of depression

The director of the new documentary, Kevin Pollak, tells Jessica Barrett how he got them to talk
Has The Archers lost the plot with it's spicy storylines?

Has The Archers lost the plot?

A growing number of listeners are voicing their discontent over the rural soap's spicy storylines; so loudly that even the BBC's director-general seems worried, says Simon Kelner
English Heritage adds 14 post-war office buildings to its protected lists

14 office buildings added to protected lists

Christopher Beanland explores the underrated appeal of these palaces of pen-pushing
Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Scientists unearthed the cranial fragments from Manot Cave in West Galilee