London midday: Greek optimism lifts the Footsie

17th Feb 2012 11:41

- Footsie rises as Greek optimism boosts buying. - Resources stocks track commodities prices higher. - UK retail sales beat expectations.The FTSE 100 had held on to gains by lunchtime - keeping its head above the 5,900 mark - as Greece comes ever closer to its crucial second bailout. Meanwhile a better-than-expected retail sales report boosted sentiment here in London.The latest reports from Greece are pointing to the confirmation of the European Central Bank's (ECB's) participation in the debt swap and an increased control over the bailout by Eurozone officials. The ECB seems to have finally agreed to forgo profits on the Greek bonds that it had bought at a discount. According to an e-mail interview with Reuters, the president of the Bundesbank, Jörg Asmussen, confirmed that this was the monetary authority's intention. Though it's not quite clear how the process would go through, experts expect the ECB Greek debt holdings to be purchased by the European Financial Stability Facility(EFSF) bailout fund.The Athens General Index has risen over 4% today with investors showing optimism that leaders can secure the next bailout.In other news, UK Prime Minister David Cameron and French President Nicolas Sarkozy are set to get over their differences and make up today. On the docket is the signing of a pact on nuclear power.Merkel was scheduled to meet up with Italian Prime Minister Mario Monti in order to discuss the situation in Greece. Their meeting had to be cancelled due to the announcement that German President Christian Wulff had handed in his resignation due to the recent scandal over the alleged granting of political favours. It has just been decided that Monti, Merkel and Greek Primer Minister Lucas Papademos will hold a conference call today.Domestically, UK retail sales volumes increased by 0.9% month-on-month (2.0% year-on-year) in January, according to the Office for National Statistics (ONS). The consensus estimate was for a decrease of 0.4% month-on-month. However, commenting on the data after the release, economists at Barclays Capital said that, "while we expect household consumption to improve gradually this year as falling inflation eases the pressure on household finances and improving economic conditions are likely to boost consumer sentiment, we do not expect the current pace of increases to be sustained."MINERS GAIN ON IMPROVING GREEK OUTLOOK AND RISING COMMODITIES PRICESThe miners were in demand as metals prices rose on the back of optimism over Greece. The value of gold in particular was being helped by billionaire hedge-fund tycoon John Paulson who has said that now is the time to buy: "by the time inflation becomes evident, gold will probably have moved, which implies that now is the time to build a position in gold," he said in a letter seen by Bloomberg. Furthermore, the World Gold Council reported yesterday that gold demand in 2011 was the highest since 1997, helped by record investment from China. Randgold Resources was a top performer by midday, while sector peers Vedanta Resources and Xstrata were also making strong gains.Anglo American rose after notching up record underlying earnings in 2011. Group revenue including associate companies climbed 11% to $36.5bn from $32.9bn, while earnings before interest, tax, depreciation and amortisation (EBITDA) also moved up 11% to a record level of $13.3bn from $12.0bn. Banking stocks Royal Bank of Scotland, Barclays and Lloyds were all higher on the back of hopes that the Greek crisis could be coming to an end.Water supplier Severn Trent fell after saying that full-year consumption levels across its measured income base are expected to be lower than last year, in line with the trend seen in the first half. Nevertheless, the firm said that no new material trading events or transactions have occurred since the end of the first half, and that trading has been in line with expectations. On the FTSE 250, miners were performing in line with their FTSE 100 peers with Petropavlosk, New World Resources, Kenmare and Talvivaara Mining on the rise.Meanwhile, instrumentation and controls group Spectris rose after adjusted pre-tax profit rose 45% to £191.6m in 2011, while sales broker through the billion pounds barrier,p 23% year-on-year.BCFTSE 100 - RisersRoyal Bank of Scotland Group (RBS) 27.80p +3.93%Vedanta Resources (VED) 1,304.00p +3.90%CRH (CRH) 1,320.00p +3.45%Lloyds Banking Group (LLOY) 35.50p +3.24%IMI (IMI) 952.50p +2.81%Meggitt (MGGT) 383.00p +2.41%GKN (GKN) 224.30p +2.33%Weir Group (WEIR) 2,014.00p +2.29%Randgold Resources Ltd. (RRS) 7,140.00p +2.29%Man Group (EMG) 135.00p +2.27%FTSE 100 - FallersAshmore Group (ASHM) 389.70p -2.11%SABMiller (SAB) 2,521.00p -1.23%Experian (EXPN) 940.00p -1.21%Tesco (TSCO) 316.60p -1.16%British American Tobacco (BATS) 3,113.00p -1.11%Unilever (ULVR) 2,055.00p -0.72%Smiths Group (SMIN) 1,049.00p -0.66%BAE Systems (BA.) 323.10p -0.65%British Sky Broadcasting Group (BSY) 685.00p -0.65%Shire Plc (SHP) 2,286.00p -0.61%FTSE 250 - RisersKenmare Resources (KMR) 60.95p +4.19%Petropavlovsk (POG) 706.00p +3.82%Afren (AFR) 129.90p +3.67%Home Retail Group (HOME) 106.30p +3.40%Persimmon (PSN) 583.00p +3.19%Dignity (DTY) 777.50p +2.91%Berkeley Group Holdings (The) (BKG) 1,353.00p +2.81%New World Resources A Shares (NWR) 505.50p +2.62%Talvivaara Mining Company (TALV) 289.00p +2.52%Phoenix Group Holdings (DI) (PHNX) 576.50p +2.49%FTSE 250 - FallersDomino's Pizza UK & IRL (DOM) 474.20p -3.07%Perform Group (PER) 270.20p -2.45%BH Global Ltd. USD Shares (BHGU) 11.66 -2.02%Barratt Developments (BDEV) 120.40p -1.87%Elementis (ELM) 164.60p -1.38%Greggs (GRG) 528.00p -1.31%Unite Group (UTG) 187.70p -1.21%Big Yellow Group (BYG) 293.90p -1.14%Euromoney Institutional Investor (ERM) 707.00p -1.12%Redrow (RDW) 125.60p -1.10%