The FTSE 100 extended Wednesday’s gains this morning, driven by optimism about Greece’s progress in securing the much needed financial aid. The Footsie added 29 points (0.5 percent) to reach 5,885.
The UK’s blue chip index surged 89 points (1.55 percent) yesterday after the Greek parliament passed the austerity bill to save the budget €28 billion. The approval of the austerity package was key to securing the next €12 billion payout from the EU, which should allow Greece to remain solvent.
With the immediate pressure from fears of a Greek debt default relieved, demand for resources and financial stocks rose on Wednesday and remained strong today.
Lloyds (LON:LLOY) was the top performer in the FTSE 100 in early afternoon.
The part-nationalised bank surged 8 percent to 48 pence after revealing plans to terminate 15,000 jobs in an effort to achieve annual savings of £1.5 billion by 2014.
Another bailed out bank, Royal Bank of Scotland (LON:RBS), rose 2.8 percent to 38 pence in sympathy.
Oil and gas explorer BG Group (LON:BG) followed, climbing 4.4 percent to 1,409 pence in afternoon trade after doubling the oil and gas reserve estimates for its interests in the Santos basin offshore Brazil.
The Santos discovery is now believed to contain 6 billion barrels of oil with a possible upside of another 8 billion barrels.
Equities on Wall Street were buoyant on Wednesday with the blue chip Dow Jones Industrial Average (DJIA) index posting its third straight daily gain on the back of the Greek austerity update and positive US home sales data.
The National Association of Realtors bucked the gloom in the real estate sector yesterday, revealing that its pending home sales index rallied 8.2 percent in May after plunging 11 percent in April.
Analysts expected home sales to pick up last month, but at a much slower pace.
Financial bookmakers are expecting US stocks to extend their winning streak today.
Futures for DJIA rose 22 points (0.2 percent), while futures for the broader S&P 500 index climbed 2.5 points (0.2 percent) before trading opened on Wall Street.
Shares in First Solar (NYSE:FSLR) rallied 6 percent in pre-market trading in New York. EBay (NYSE:EBAY) and Hess Corp (NYSE:HES) added 3 percent and 1.5 percent respectively. Yahoo (NYSE:YHOO) added 1 percent in pre-market.
Traders are now looking to today’s key jobless claims data, which will give an indication about the strength of the job market recovery in the US.
Asian markets were in buying mode today. Japan’s benchmark Nikkei 225 index added 19 points (0.2 percent) to end Thursday’s session at 9,816. China’s Shanghai Composite Index rallied 33.5 points (1.2 percent) to close at 2,762.