Greece debt hopes help push FTSE into the black

Ratings agency Standard & Poor's delivered some welcome good news for Greece as it took the country off credit watch for a possible

downgrade, while EU finance ministers also said they had a vague blueprint for possible loans to help out with the Greek economy.

The FTSE 100 Index closed 26.58 points higher at 5620.43 amid the general optimism.

In the US, the Federal Reserve held benchmark rates near zero yesterday and renewed a promise to keep them exceptionally low for an extended period while pointing to increased momentum in the economy's recovery.

The central bank's nod to a firmer rebound from the deepest recession in decades hints that it is moving closer to dropping its promise to hold borrowing costs at rock bottom levels, suggesting rate hikes could come within several months.

For a second consecutive meeting, Kansas City Federal Reserve Bank President Thomas Hoenig dissented, saying the commitment to keep rates exceptionally low for an extended period was no longer warranted.

The central bank reiterated that it intends to wrap up purchases of mortgage-related assets by the end of March, but would monitor the economic outlook and financial developments to see if more support is necessary.

Mining stocks largely underpinned gains for London's Footsie as a weaker dollar supported base metal prices. Sterling approached 1.52 against the greenback, while the euro also edged higher against the dollar amid the optimism over Greece.

Eurasian Natural Resources was the sector's leading riser up 33p to 1166p. Other miners on the front foot included Randgold Resources, which gained 122p to stand at 5000p.

British Airways shot to the top of the risers' board – up 5 per cent, or 105/8p to 246p – after it agreed moves with unions to tackle its 3.7bn deficit.

In a quiet session for corporate news, security firm G4S slipped despite posting a 10 per cent advance in underlying profits to 500.3m. While the company has weathered the recession, it said organic revenues would be flat this year after a rise of 3.7 per cent in 2009 and growth of 9.5 per cent in 2008.

Shares have enjoyed a strong run and were down 9.4p to 2691/4p, a fall of 3 per cent.

But Royal Bank of Scotland rose as investors digested speculation that it is planning to restructure up to 10bn of its existing debt in a bid to boost its capital strength. Shares added 1/2p to 431/4p.

Other banks making progress included Barclays, which added 87/8p to 3571/2p, and HSBC, which was 21/2p dearer at 6831/2p.

BT Group meanwhile climbed for a second successive session, up 13/4p to 1263/8p, as it continued to benefit from Monday's broker upgrade from Citigroup.

Royal Dutch Shell was another riser, up 261/2p to 18561/2p, after chief executive Peter Voser unveiled a strategy update that included plans for more cost savings and an upstream production target of 3.5 million barrels of oil a day by 2012, up 11 per cent on last year.

In the FTSE 250, department store chain Debenhams edged 3/4p lower to stand at 701/4p after a trading update left markets underwhelmed. Sales growth edged 0.3 per cent higher in the first half and profits are set to come in ahead of last year in line with City hopes.

The biggest Footsie risers were British Airways, Legal & General ahead 25/8p to 823/8p, Eurasian Natural Resources and Barclays.

The biggest Footsie faller was G4S.