Markets Bounce Back on Eurozone Resolution Hopes

Equity markets were led higher by mining and commodities stocks as investors grew optimistic that Eurozone policymakers would forge an agreement to address the crisis Editors 27 September, 2011 | 5:19PM
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The FTSE 100 was up 205 points to 5,294 as German Chancellor Angela Merkel and Greek Prime Minister George Papandreou met to thrash out a solution. European markets also soared as there seemed an outside chance that Greece may yet avoid a default. The CAC 40 was up 5.7% to 3,023 and the DAX up 4.5% to 5,585.

The mining companies were the chief beneficiaries of the market’s optimism with Antofagasta, Kazakhmys and Vedanta Resources all among the day’s top performers. It was also another good day for the banks with Barclays, Lloyds and RBS all up over 5%. BAE Systems recouped some of the losses that followed from its announcement yesterday that it was to cut 3000 jobs.

There were few losers in today’s markets, but JD Sports continued to sell off after its recent strong run. The Rank Group also sold off as investors fretted about its trading statement in October.

Shares in the London Stock Exchange rose 1.6% to 840.5p on the news that it seemed to have won its battle to take over LCH Clearnet. The board of the clearing house supported LSE’s bit over that of rival bidder Markit.

Game Group also reversed a long slide in its share price, despite announcing that the video games market had been tougher than expected and revenues had fallen around 10%. Markets had already anticipated higher losses and were cheered by the group maintaining its revenue guidance for the full year and the dividend.

DMGT shares also shrugged off a warning that the group’s full year operating profits would be below those of last year. The shares were flat in spite of the group’s statement that weaker advertising revenues would continue to weigh on earnings.

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