Stock market close: Footsie soars on G20 deal

By THIS IS MONEY
Updated: 12:04 EDT, 2 April 2009

Strong advances from FTSE 100 index financial stocks and miners led a bounce back through the 4,000 barrier today as economic optimism gathered pace.

Eye on the market: Will markets react well to the G20?

The Footsie was 4.3% up amid hopes of a recovery, as world leaders also gathered in London's Docklands for the G20 Summit.

The blue chip share index's move past 4,000 - closing 169.4 points up at 4124.9 - marked the first time through the psychologically key barrier in around six weeks.

The surge came despite fears the summit will hit the buffers after France and Germany warned they would not sign up to a deal without tougher regulation of financial markets.

Unexpectedly positive housing news from Nationwide also boosted sentiment. House prices rose for the first time in 16 months during March as buyers continued to return to the market, according to the figures.

This was followed by a Bank of England report which suggested the credit crunch may be easing as the availability of credit to individuals and businesses was predicted to improve during the coming three months.

Unexpected improvements in US economic indicators yesterday had already put the FTSE 100 on the front foot, with sentiment helped by data revealing manufacturing activity had not declined as much as feared in March.

Commodity stocks and miners were today benefiting from the prospect of increased global demand, with Kazakhmys leading the way, with a 17% hike after an upgrade from Citigroup. Shares rose 68p to 459.5p.

Vedanta Resources followed close behind, up 101p at 793.5p and Xstrata was 57p up at 567.5p.

Banks were also on the front foot, with HSBC up 11.8% - or 48.25p - at 459p. It was followed by Royal Bank of Scotland and Barclays, which gained 3.1p at 28.2p and 11.4p to 168.4p respectively.

Housebuilders were soaring in the FTSE 250 after Nationwide's news of a 0.9% hike in March property prices and as Taylor Wimpey said it was nearing a deal to restructure its £1.55bn debt burden.

Taylor Wimpey rose 23.4%, or 5.5p to 29p, Barratt Developments increased 18p to 107p and Redrow lifted 23.75p to 176p.

Also in the second tier, babycare retailer Mothercare slid 1% after warning that margins would come under pressure from the falling value of sterling.

Shares lost 4.5p to 391.5p despite the firm reporting a 3.7% hike in quarterly like-for-like sales.

Elsewhere, Italian restaurant chain Prezzo rose 7.5%, or 1.75p to 25.25p, after it reported a 'robust' performance and said current trading was in line with expectations.