FTSE up as Spanish debt fears ease

The FTSE 100 edged up this morning but trading was light as investors digested the results of a Spanish debt auction.

Spain's 10-year government bond yield surged above six per cent earlier this week, raising fears it may have to seek an international bailout.

But this morning's auction saw 10-year bonds sold at a yield of 5.743 per cent, up from 5.403 per cent when the bonds were last sold in February. The rate for two-year bonds dropped slightly to 3.463 per cent from 3.495 per cent in October.

Hargreaves Lansdown was the top blue-chip gainer, up 3.8 per cent as the investment manager brushed off investor jitters about the state of Europe's economy by reporting £1bn net inflow of new funds from clients in the first three months of 2012.

Another fund manager, Aberdeen Asset Management, saw a 2.1 per cent rise.

Engineer IMI was up 2.5 per cent, lifted by an upgrade in rating from Jefferies International to "buy" from "hold". Rolls-Royce, also in the sector, nudged up by two per cent.

Croda International lifted by 2.3 per cent while InterContinental Hotel Group also lifted by just over two per cent.

Banks rallied modestly in early trade, with Barclays up 1.5 per cent. Lloyds was up 1.1 per cent and RBS 0.2 per cent.

Miners also edged up with Anglo American putting on 0.7 per cent and Rio Tinto 0.4 per cent. Anglo reported a rise in copper production which gave its stock impetus.

Significant fallers on the index included hedge fund giant, Man Group, down 1.6 per cent.

Broadcasters BskyB and ITV were down just over one per cent. Scottish and Southern Energy lifted by 0.7 per cent.

Argos stores chain-owner Home Retail Group shed 2.1 per cent as Bernstein Research started coverage of the firm with an "underperform" rating.

On the FTSE 250 department store giant Debenhams was up more than two per cent after reporting a 1.4 per cent rise in profit to £127.1m for the six months to 3 March.

Also in the retail sector WH Smith reported first-half pre-tax profit of £66m up from £64m a year ago and hiked its interim dividend by 15 per cent to 8.3 pence per share. However its stock dipped by more than one per cent as investors gave the figures a poor reception.

Housebuilder Persimmon was up more than two per cent after giving an upbeat trading forecasts for 2012.

C&W Worldwide was the biggest FTSE 250 faller, dropping 23 percent after India's Tata Communications said yesterday it would not make a bid for the British firm.

In Asia the Nikkei closed down 0.8 per cent and the Hang Seng up just over one per cent.