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FTSE 100 soars to 21-month high boosted by Greek bailout

BRITAIN’S top shares hit a 21-month closing high for the third day in a row yesterday, helped by a rally in banks as sovereign debt concerns faded, while retailers were boosted by upbeat results from Next and UK retail sales.

The FTSE 100 ended 49.77 points higher at 5,727.65, finishing above the 5,700-mark for the first time since 19 June 2008.

Royal Bank of Scotland climbed 2.5 per cent as the bank unveiled a complex plan to restructure £15.8bn of debt as part of a balance sheet overhaul.

Lloyds Banking Group added 1.1 per cent to 64.9p. The 41 per cent state-owned bank is trading above the government’s average investment per share on at least one measure.

Barclays, HSBC and Standard Chartered gained 1.7 to 3 per cent.

“UK Budget and sovereign debt headwinds have eased, helping the FTSE break through the 5,700 barrier. Staying above that level has buoyed investor confidence,” said Jimmy Yates, head of UK equities at CMC Markets.

Investors cheered news that European Union leaders edged towards consensus on a financial safety net for Greece on strict German conditions ahead of a key summit yesterday after the European Central Bank threw Athens a major reprieve on funding rules.

A pledge by Dubai to support the restructuring of debt-laden state-owned firms Dubai World and Nakheel also provided some relief.

According to Stephen Pope, chief global equity strategist at Cantor Fitzgerald, the next resistance level for the FTSE 100 is 5,973.

The blue-chip index has risen nearly seven per cent so far in March, and is heading for its best month since last August.

With the Budget out of the way, the Labour government is widely expected to hold an election on 6 May.

Fashion retailer Next soared five per cent after it beat company guidance with its 2009/10 profit.

The bullish results combined with upbeat UK retail sales figures helped sentiment around the sector, with Marks & Spencer, Home Retail and non-blue chips Clinton Cards and Ted Baker up 1.3 to 8.3 per cent.

But home improvements retailer Kingfisher shed 1.2 per cent as some analysts expressed disappointment about the extent of dividend increases after its results.

Firmer metal prices helped miners build on Wednesday’s gains, with Xstrata, Randgold Resources, Anglo American and Kazakhmys up 0.6 to two per cent.

Thomas Cook topped the blue chip risers, up 6.2 per cent on a bullish trading update. Peer TUI Travel put on 2.4 per cent. British Airways rose 3.4 per cent. Spanish airline Iberia’s board meeting ended yesterday without a decision on its tie-up with British Airways but a spokesman said he still expects a merger announcement this month.

Sentiment was also aided by better than expected US?jobless data.