BANK and commodity stocks hoisted Britain’s top shares to a five-week closing high yesterday, on mounting optimism over the prospects for a solution to Europe’s debt crisis after a weekend meeting of French and German leaders.
The FTSE 100 ended up 95.60 points, or 1.8 per cent, at 5,399.00, after Nicolas Sarkozy and Angela Merkel pledged to unveil new measures to solve the Eurozone debt crisis by the end of October.
Volumes were thin at 64 per cent of the index’s 90-day daily average, an indication investors were not fully convinced by the news, with traders saying markets were likely to be jittery until the leaders deliver on their promise.
“Three weeks is a long time in the markets, and (they) could remain volatile,” Manoj Ladwa, senior trader at ETX Capital, said.
A small increase in “put” protection – options to hedge against downside risk – was seen, although notably less than over the last week, according to Atif Latif, director of equities and derivatives at Guardian Stockbrokers.
Mining and energy stocks added most points to the index as the nervousness subsided over the Eurozone debt situation, at least for now.