Bank stocks up as Eurozone fears ease

The FTSE 100 today opened with a strong performance in the banking sector with investor confidence being buoyed by efforts to bring the Eurozone back in line after months of damaging instability.

The International Monetary Fund (IMF) is seeking to raise up to $600bn (£388.8bn) which would help ease worries about funding in the Eurozone.

Investors were also hopeful that a bond swap deal needed to avoid a messy default in Greece would be agreed.

They will also will be hoping that upcoming results from Bank of America Corp and Morgan Stanley will mirror Goldman's results yesterday which were better than forecast.

On London's blue chip index banks made up three of the highest climbers on hopes that the Eurozone bloc was finally getting its house in order. Barclays was up four per cent, RBS 2.4 per cent and Lloyds 2.1 per cent.

Other risers included safety testing firm Intertek, up 2.7 per cent, and engineer Weir Group 2.2 per cent. On the negative side Essar Energy lost five per cent as it continued to be hit by a controversial tax dispute with the Indian authorities.

Russian resource giant Polymetal was down 1.8 per cent after its production update for the fourth quarter left investors unimpressed.

iPhone chip maker Arm Holdings also dipped — down around 1.9 per cent.

Food retailers were hit by broker comment, with Goldman Sachs downgrading its ratings for both Sainsbury's and Tesco to "sell" and "neutral" respectively. Sainsbury's shed 1.4 per cent and Tesco lost 0.1 per cent.

Among weaker drug stocks, AstraZeneca shed 1.2 per cent after US drug regulators said they needed further clinical data, possibly including new clinical studies, before approving a new diabetes drug.

In Asia the Nikkei closed up 1.04 per cent and the Hang Seng 1.3 per cent as the renewed optimism over the Eurozone boosted stocks.

Meanwhile in major corporate news, iconic photographic firm Kodak announced that it had filed for administration. However it said that it had secured $950m in funding to help it survive the process.

Across the Atlantic later the latest weekly jobless claims and December housing starts are due for release.