As it was, Berlusconi lost his majority in parliament, making his resignation more likely. The markets were buoyed in the meantime by good corporate news with the FTSE 100 closing up 1.03% to 5,567. European markets were also higher.
Lloyds was among the day’s biggest gainers, despite updating the market that it was unlikely to meet its targets over the next three years due to the slowing economic climate. Total income fell from £5.5bn to £5.1bn, but its combined businesses made a pre-tax profit of £644m and loan impairments fell 22%. Investors were relieved that there were no more big surprises after the departure of the chief executive last week.
The news dragged up the rest of the sector, with HSBC, Royal Bank of Scotland and Barclays all showing strong performance.
Vodafone shares climbed after it beat estimates, reporting revenues of £23.5bn for the six months to 30 September, up 4.1% on last year. Northern European and emerging markets contributed to growth. The group took a hit on its Greek business, however, writing down £450m.
Associated British Foods reported earnings ahead of expectations and was upbeat about the prospects for 2012. Its shares were up 1.44% to 1,128p.
At the other end of the scale AstraZeneca’s shares dipped by 3.2% to 2,872p as the early results from its new antidepressant drug disappointed.
Marks & Spencer also had a weak day’s trading after it said that full year profits would be below expectations. The group, often seen as a bellwether for the high street, was hit by the weakness of the consumer and increased promotional costs. Intercontinental Hotels' interim profits also disappointed, sending the shares lower by 2% to 2,073p.
