Banks and commodities lift FTSE

The FTSE 100 tracked gains in Asia and on Wall Street this morning as fears of an economic meltdown in Greece were eased with France moving to give the country a reprieve.

Banking and commodity sectors saw a lift as new life was breathed into global markets.

French President Nicolas Sarkozy said his country's banks would help Greece by giving it 30 years to repay loans as Greek ministers debated a new raft of austerity measures required to release more life-saving funds from the Eurozone.

Italy's biggest bank Intesa Sanpaolo also said European banks should work together to ease Greece's pain.

Meanwhile in the UK investors were also digesting figures confirming that UK GDP grew 0.5 per cent in the first three months of the year.

Cairn Energy and Vedanta Resources were both up around 2.5 per cent on London's blue chip index. The lift came after Vedanta announced that it had bought a further 10 per cent of India's Cairn.

United Utilities was up 2.4 per cent while engineer GKN nudged up just over two per cent.

Among banks Barclays was up 1.6 per cent, Lloyds 0.9 per cent RBS 1.2 per cent.

On the down side the biggest faller was insurance buyout vehicle Resolution, which dipped just over one per cent after a downgrade by Goldman Sachs.

Goldman juggled its ratings in a sector review, upgrading Prudential and Legal & General, which added 1.9 per cent and 1.6 per cent respectively, but downgrading Aviva, Resolution and Standard Life.

Drinks giant Diageo was down by around one per cent after yesterday announcing that it had become the first spirits sector company to take over a listed Chinese company.

Asian focussed bank Standard Chartered also dipped after giving details of its cost-cutting package which had protected its full-year profit.

Retailers on the FTSE saw mixed fortunes with chocolatier Thorntons seeing a small lift after announcing plans to close 120 shops. However, Carpetright dropped by more than three per cent as it revealed that its profit had dived by 40 per cent.

US stocks gaining nearly one per cent yesterday to end a three-session losing streak, while the Nikkei in Tokyo gained 0.7 per cent overnight.