FTSE above 5700 as Greece debt plan boosts sentiment

The FTSE 100 Index pushed above the 5700 mark for the first time in 21 months yesterday as an imminent bailout for debt-laden Greece boosted stocks.

Reports suggested France and Germany had agreed to financial support for the stricken nation, with funding coming jointly from European countries and the International Monetary Fund.

The Footsie finished 49.77 points, or 0.9 per cent, ahead at 5727.65 as Wall Street shares also advanced, helped by better than expected economic and corporate news.

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The number of US workers filing for jobless aid fell sharply last week and a gauge of underlying labour market trends hit its lowest in 18 months, boosting hopes the economy is on the verge of creating jobs.

But even while the report released yesterday pointed to improvement in the battered labour market, recovery is likely to be too slow to make a huge dent in the country's high unemployment rate and will keep pressure on President Barack Obama for solutions.

Initial claims for state unemployment benefits fell 14,000 to a

seasonally adjusted 442,000, the Labor Department said. The report included annual revisions to the weekly unemployment claims seasonal factors going back to 2005.

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The pound however was under more pressure, down at 1.48 against the dollar as analysts worried that Wednesday's Budget offered nothing new on deficit reduction plans. Sterling was broadly flat against the euro at 1.11.

In London, Thomas Cook led the London market higher with a 6 per cent, or 157/8p, gain to 272p after the tour operator's trading update boasted of strong summer holiday sales across its markets.

Thomson Holidays owner TUI Travel – which posted its own healthy update on Wednesday – followed Thomas Cook higher with a 71/4p rise to 3083/8p.

Retailers were also in focus after a bigger than expected jump in official sales volumes during February and plenty of corporate news.

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Fashion chain Next added 104p to 2174p after lifting profits 18 per cent to 505m in the 12 months to January – as well as growing like-for-like sales after four years of declines.

But Kingfisher was a casualty, losing 23/4p to 2253/4p as the B&Q owner's results were in line with annual expectations, but maintained a cautious outlook. A smaller than expected dividend payout also disappointed investors.

Among the smaller-cap stocks, Clinton Cards cheered 33/4p to 49p after the company flagged up better than expected annual results thanks to a tight rein on costs. But it also warned of a "more subdued" start to second half trading.

Back in the top flight, Vodafone was on the back foot after Morgan Stanley brokers cut their rating on the stock amid worries over its exposure to European markets. Shares fell 13/4p to close at 1471/4p.

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Another Footsie stock on the wrong end of a broker downgrade was mining firm Eurasian Natural Resources, which lost 15p to 1186p after downbeat comments from Credit Suisse.

But banks such as Royal Bank of Scotland were among the blue-chip gainers after moves to boost its capital strength.

This pushed shares in RBS up 11/8p to 455/8p. Elsewhere in the sector, HSBC added 201/4p to end the day at 6943/4p.

All Bar One pubs group Mitchells & Butlers was a prominent riser in the FTSE 250 after Citigroup upped its price target following the firm's strategic review on Wednesday, which will see a bigger emphasis on

food. The firm's shares rose 203/4p to 3223/4p, or 7 per cent.

The biggest Footsie risers were Thomas Cook, Next, Cairn Energy ahead 147/8p to 4263/4p and Scottish & Southern up 39p to 1126p.