Stocks boosted by good news on Greek banks - London Report

THE REOPENING of Greek banks, as well as positive broker sentiment on a few of the bigger names in the market helped to boost British stocks yesterday.

The blue-chip FTSE 100 index closed up 0.2 per cent at 6,788.69 points after falling in the previous session.

Shares in HSBC rose 1.1 per cent to 586.6 pence, adding the most points to the FTSE 100 index, after Citigroup raised its rating on the stock to “buy” from “neutral” and increased its price target to 635p from 625p.

“Citi’s upgrade is benefiting HSBC. Despite its exposure to the Asian market, HSBC remains well capitalised and financially robust and is looking to streamline its operations wherever possible,” Richard Hunter, head of equities at Hargreaves Lansdown, said.

“Some stabilisation in Greece has also helped market sentiment. If we don’t hear any bad news from Greece in the next couple of days, investors will turn back to fundamentals such as quarterly earnings,” he added.

Greeks banks reopened three weeks after closing to stop the system collapsing, the first cautious sign of a return to normal after a deal to start talks on a new package of bailout reforms.

Also on the upside, Sports Direct shares climbed 3.4 per cent after Exane BNP Paribas raised its target price for the sporting goods retailer’s stock to 860p from 800p.

In other gainers, Rolls-Royce edged 0.4 per cent higher after the British engineering company, under pressure after successive profit warnings, said its aero engine business won two new contracts totalling $2.23bn (£1.43bn).

But miners were knocked back after gold plunged to its lowest level in more than five years as bullion’s safe-have status took a knock from mounting expectations of a US rate hike.

Blue-chip gold producers Randgold Resources and Fresnillo fell 4.7 and 4.4 per cent respectively, while mid-cap miners Acacia and Centamin, along with a small-cap peer Hochschild, tumbled between 13.7 and 9.1 per cent.

“Given where gold is going, I think that sector’s going to suffer quite a lot,” Numis Securities analyst Cailey Barker said.

Aveva was the biggest FTSE 250 gainer, surging nearly 27.3 per cent after France’s Schneider Electric said it would combine its software unit with the British company in a reverse takeover designed to create a global leader in industrial software.