London rally continues as Greek plan lifts sentiment

The 4.3bn plan – which won early support from credit rating agencies – steps up austerity measures aimed at lifting the country out of the major financial crisis which has unsettled markets in recent weeks.

Wall Street markets posted modest gains following the Greek developments, as well as signs of accelerating growth from services firms. This helped the FTSE 100 Index add 49.15 points to 5533.21 after stuttering earlier in the session.

But David Jones, chief market strategist at IG Index warned on the Greek cuts: "It's still too early to tell whether this will be enough to convince the markets."

Gains for financial firms aided the top flight's progress after Standard Chartered delivered above-expectations profits. Shares in the Asia-facing bank were 84p higher at 1674p.

The pound, meanwhile, was able to claw its way back above 1.51 dollars after suffering its biggest one-day fall against the greenback for more than a year on Monday amid concerns over a hung parliament in the UK.

Sterling also edged ahead against the euro as traders noted better than expected figures from the UK service sector in February, fuelling hopes that GDP will be in positive territory in the first quarter of 2010.

In the US, private employers eliminated fewer jobs last month, suggesting the job market may be on the mend, while the US services sector grew at its fastest pace since the recession began.

Also, planned layoffs by US firms in February fell to the lowest level since 2006, according to a report that also said employers may be poised to start adding workers.

The news came ahead of tomorrow's key monthly US nonfarm payrolls report and supports the view the job market may be recovering.

Prudential was among the Footsie risers, pulling out of its nosedive after falling almost 20 per cent since news of its 23.7bn takeover of the Asian arm of insurer AIG.

Worries over the risks attached to the deal and the prospect of a 14bn rights issue pushed the blue-chip stock sharply lower on Monday and Tuesday before signs of a recovery with a rise of 3 per cent, or 121/2p, to 500p during yesterday's session.

As well as Standard Chartered, which posted profits and income slightly ahead of market forecasts, shares in Barclays added 81/8p to 3297/8p and Lloyds Banking Group lifted 13/8p to close at 523/4p.

Aviva lifted 11p to 3901/4p ahead of annual results due out later today.

Investor enthusiasm over broadcaster ITV's return to profit quickly wore off.

The firm topped the FTSE 250 risers' board for a while after it said advertising revenues were showing signs of improvement. But the stock fell back to stand 1/8p off at 55p.

Among other companies with results out yesterday, housebuilder Taylor Wimpey fell 3 per cent despite reporting a steady start to its new financial year. Shares were off 11/4p to 363/4p.

Transport firm Arriva was a strong riser in the FTSE 250, however, after it increased its full-year dividend by 5 per cent and said revenues trends were much improved in its rail division.

Shares lifted 33p to 563p.

The biggest Footsie risers were Lonmin up 104p to 1942p, Standard Chartered, Legal & General up 33/4p to 77p and Kazakhmys ahead 70p to 1516p.

The biggest Footsie fallers were RSA down 51/4p to 1247/8p and InterContinental Hotels off 211/2p to 9531/2p.