Stocks in the UK were buoyed by Ireland’s decision to apply for financial aid from the European Union, following weeks of speculation whether Ireland will choose to cope with its banking crisis on its own or give in to the pressure to accept a bailout to prevent contagion.
Chancellor of the Exchequer George Osborne confirmed today that Britain will contribute £7 billion to the rescue package, which is expected to reach up to €90 billion.
However, the tide was turned later in the session and the FTSE 100 dipped 0.4% after rising 0.8% in early trade.
Tour operator TUI Travel (LON:TT), mining major Vedanta Resources (LON:VED) and caterer Compass Group (LON:CPG) led the blue chips with gains of about 2%.
Vedanta has made solid progress with its acquisition of Cairn Energy’s (LON:CNE) Indian business, securing a financial deal for £3.75 billion from a consortium of banks.
These banks include Goldman Sachs (NYSE:GS), Credit Suisse (NYSE:CS), Barclays (LON:BARC), Royal Bank of Scotland (LON:RBS), Morgan Stanley (NYSE:MS), JP Morgan (NYSE:JPM), Citibank (NYSE:C) and Standard Chartered (LON:STAN).
Compass will release its final results on Wednesday.
Capital Shopping Centres Group (LON:CSCG) and Scottish & Southern Energy (LON:SSE) tacked on more than 1.5%.
Royal Bank of Scotland (LON:RBS) was at the bottom of the pile with a 3.3% loss. Fellow part-nationalised bank Lloyds (LON:LLOY) declined 1.3%.
On Friday, broker Macquarie cut its rating for RBS from “outperform” to “neutral”.
Interdealer broker ICAP (LON:IAP) followed, shedding 1.7%. The company also fell victim to a downgrade today after Execution Noble cut its recommendation for the stock from “buy” to “hold”.
Insurers Legal & General (LON:LGEN) and Prudential (LON:PRU) added just over 1%.
Infrastructure software developer Autonomy Corporation (LON:AU) rose 1%.
In the US, the Dow Jones Industrial Average (DJIA) managed to post gains on Friday following a late surge, rising 0.2%.
Hewlett-Packard (NYSE:HP) was in the lead, advancing 1.9%.
American Express (NYSE:AMX) and DuPont (NYSE:DD) tacked on 1.2%.
General Electric (NYSE:GE) and Home Depot (NYSE:HD) climbed 1.1%.
Boeing (NYSE:BA) was the heaviest faller in DJIA with a 1.58% loss.
Disney (NYSE:DIS) declined 1.5%.
The broader S&P 500 index gained 0.25%. The technology heavy NASDAQ composite tacked on 0.15%.
Futures for the Dow Jones and S&P 500 indexes point to a lower open on the Wall Street.
Today’s US data will include an update on the Chicago Fed index.
Commodities
US light, sweet crude for January delivery advanced to US$82.35/barrel, while January Brent Crude reached US$84.93/barrel.
Gold and silver were flat at US$1,355/oz and US$27.35/oz respectively, Platinum declined to US$1,655/oz.
Base metals were in decline. Copper and zinc fell to US$3.80/lb and US$0.977/lb respectively. Nickel held steady at US$9.77/lb.