Banks headed higher as governments back BP

EUROPEAN markets are set to jump higher on the open this morning, with bank stocks most likely to rally following on from the agreement in the US over the details of the financial reform bill which was hammered out last week, and which appears to be less strict than many in the sector had feared.

GFT is quoting the FTSE 100 index to open up 26 points from Friday’s close, at a level of 5,072. The German DAX is also expected to start higher, up 27 points at 6,097, and the French CAC is forecast to open up 22 points at 3,541.

So a positive start is on the cards then. The US House could vote on the bill as soon as tomorrow, and the Senate shortly thereafter.

The spreadbet and CFD day trader’s market-of-the-moment BP will be under focus yet again – after dropping another 6 per cent on Friday which in itself was responsible for taking over 50 points off the FTSE, the weekend’s news from the meeting between Barack Obama and David Cameron, reportedly agreeing that BP should “remain a strong and stable company”, will probably lend some support to the company’s shares this morning.

In fact our call on the FTSE index would probably have been higher if it were not for the uncertainty over whether tropical storm Alex is going to miss the Gulf of Mexico coast; if it were to hit then an expensive and damaging prolonged delay in efforts to contain the spill would be likely.

•Martin Slaney is director of global dealing operations at GFT.