BRITAIN’S top shares extended gains yesterday, led by rallies in banking and commodity stocks, with the market primed for fresh economic stimulus moves later this week, building on measures agreed by an EU summit to counter the Eurozone debt crisis.
But some commentators were more pessimistic on the market outlook, feeling that with uncertainties still hanging over the Eurozone deal, any disappointment on the detail of the new measures could trigger a sell-off.
“I suppose a bit of momentum coming in from the summit on Friday, which I assume is the positive tone in the market today. That could change when we get more details about how it is going to work out, because at the moment there are a lot of open questions,” said Peter Dixon, the UK economist at Commerzbank in London.
The FTSE 100 closed 69.49 points higher, or up 1.25 per cent, at 5,640.64. The UK blue chip index jumped 1.4 per cent on Friday.
Volumes were relatively thin, at 74 per cent of the 90-day daily average, way below the level seen last Friday, showing sluggish trading activities as investors are still cautiously positioned in a market that still requires a solid driver.
Financial stocks were in demand, supported by Friday’s Eurozone news given the sector’s direct exposure to the bloc’s sovereign bonds, with insurer Aviva the top blue chip gainer, up 3.7 per cent.
Barclays rallied 3.4 per cent after having suffered a 17 per cent slump in the past three days over a Libor-fixing scandal that cost chairman Marcus Agius his job.