Resource stocks lift FTSE as Eurozone closes in on Greece debt deal

The FTSE 100 started in positive territory this morning — with hopes that Eurozone finance ministers can nail down a final agreement over the festering Greek debt pile on the rise.

Banking shares across Europe were buoyed by renewed optimism that Greece can avert a default which would derail the bloc's efforts to stabilize struggling debt-laden economies.

The country's private creditors said yesterday they could not improve their offer, which would see them take a real loss of 65 to 70 per cent on Greek bonds with officials left to hammer out a deal today.

The STOXX Europe 600 Banks index was the best performing sector, up 1.1 per cent in early trading.

In London RBS was up 1.9 per cent, Lloyds over one per cent and Barclays 0.5 per cent.

But it was resource stocks which mainly fuelled the gains on the blue chip index.

Oil company Cairn Energy lifted by 2.2 per cent after agreeing a joint venture for exploration in Greenland with Norway's Statoil.

Royal Dutch Shell was up 0.7 per cent after ING started its coverage on the company with a buy rating.

Meanwhile Vedanta lifted by 2.5 per cent. The other star performer was BA owner International Consolidated Airlines which rose 2.1 per cent.

Defence contractor BAE Systems gained two per cent after Barclays Capital upgraded it from overweight to neutral.

On the down side engineer Weir Group was off by four per cent — triggered by a downgrade from JPMorgan with IMI, also in the sector, two per cent down following a cut to its rating by Credit Suisse. Others to fall into negative territory included Next, down by 1.2 per cent, and temporary power supplier Aggreko, 1.2 per cent.

Cruise ship group Carnival was again one of the top five losers, down more than 1.2 per cent after the sinking of its boat the Concordia continued to take its toll.

In Asia the Nikkei closed down 0.01 per cent while the Hang Seng was up 0.8 per cent.

Meanwhile in a bold move in the retail sector grocer Asda, the British arm of US retailer Wal-Mart Stores, said it it will invest over £500m this year, opening 25 new stores and three depots and creating up to 5,000 jobs.